Well is there a risk if she already has the 'borrowed' money in a savings account I wonder?
There are two aspects to this. Risk and return.
No investment or deposit is risk-free. If she has money on deposit in any bank, in Ireland or elsewhere, it is at risk of default. A small risk maybe, but it's a risk and not worth taking. Deposit rates in Germany are around 2 or 3 percentage points lower than in Ireland, so that is some measure of the risk in Irish banks.
Banks make their money from taking in deposits at one price and lending them out at a higher price. OK, they may have forgotten this in the recent past, but they are beginning to recall it. It makes no sense to have a risky deposit earning 2% while paying 5.5% on a mortgage. If the bank goes bust, she still owes the mortgage, even if her deposit has vanished.
No need to do any further figures on this one. If Bank of Ireland lent you €100,000 at 5.5% to put on deposit at 3%, what would you say to them?
If the yield on a purchased propery to rent is high it might be a good investment. Plus if property prices rise she may gain from capital appreciation, (hope that one is ok as sorry I overstepped the mark yesterday). And should property prices rise she has the added bonus of already having a Dublin property availabe to her kids when they go to college and thereby her outgoings will be less.
But property prices may well fall further. Rental yields are strong in the cities at the moment, and it's certainly tempting. But it's still risky.
An investment property may turn out to be a good investment. It may turn out to be better than shares. But both involve risk. The risk in property is probably higher as you can't diversify property very easily.
Investing in AIB shares is definitely riskier than investing in a single property. But, in my opinion, investing in a portfolio of 10 to 20 shares is less risky than buying a single property. It will probably be more volatile in the short term, but over the long-term, it should offer better, less riskier returns. It would definitely be a lot less hassle.