How to buy a home in Ireland when you’ve been living abroad

If you’ve been living abroad and want to get on the property ladder in Ireland, you’ll be forgiven for thinking it’s next to impossible. The good news is there are ways to get a mortgage, even if you’ve never lived and worked in Ireland. NexVentur has partnered with EBS to assist anyone relocating to Ireland.

There are two routes to buying a home when moving to Ireland:

1. You can wait until you arrive, rent for a while, get settled in a job and then apply for a mortgage; or
2. You can buy a home while still abroad, before relocating to Ireland.

Apply for a mortgage once resident in Ireland

Although the obvious route is to relocate first and then buy, there are many variables involved. It affords time to secure work, find schools for the kids, and get settled. If this means renting while finding your feet, remember that money spent on rental is money that could be paying off your own home.

Once resident in Ireland your option is to apply for a regular residential mortgage for either a first-time or second-time buyer and follow the usual routes with banks or mortgage brokers. First-time buyers must raise a deposit of 10%, while for second-time buyers the minimum deposit is 20% of the sale price.

Most banks are going to see new arrivals in Ireland as a higher risk, even if you are returning home. Once you land a job, there’s likely to be a four to six month probation period, which lenders are wary of. There’s also the matter of your previous Australian earnings: Irish banks will require your foreign credit records and earnings abroad whilst reviewed, will not be factored in as current earnings will be used and this could impact your lending possibility. One option is to take out an Investor Mortgage, which requires a larger deposit (up to 60%) and has a much higher interest rate (currently around 4.8 – 6% p/a).
Every scenario is different, so it’s best to speak to a mortgage expert directly.

Apply for a mortgage from Australia

While you are a non-resident there is a surprisingly uncomplicated route to buying a home in Ireland. NexVentur has partnered with EBS, which specialises in holiday home mortgages, a facility that other banks don’t offer. A Holiday Home Mortgage is unique in that you can declare earnings in Australia, off-shore investments and any savings in your Australian bank account.

Holiday Home mortgages are different to Investor mortgages. They offer lower interest rates, based on residential rates, because you are seen to be buying a home that you’ll be living in, even if it’s only part time or some time in the future.

How much can I borrow to buy a home?

The rule is that you can borrow 3.5 times your annual income. For dual-income families, owning a home is more accessible than for a single person who has only one income to determine the loan amount. From 1 January 2023, first-time buyers will be able to borrow up to four times their income.

What do I need to prove to get a mortgage

EBS will ‘stress test’ your ability to repay the loan amount in a variety of ways. Looking at a six-month window, they will look at your financial activity in Australia, including rental payments, loan repayments that are due to end before the home purchase and monthly savings to determine whether you can make the repayments on the money you borrow.

You will also need to show you have enough money for the deposit, which is 30% in the case of a Holiday Home Mortgage.

Hidden costs

When calculating living expenses don’t forget the hidden extras, such as legal fees and stamp duty, which are added on to the purchase price. If you are going to bring money from abroad, EBS will take into account currency fluctuations.
NexVentur has partnered with OFX to assist with moving money. Read more on this and how you can transfer money here.

Holiday Home Mortgage interest rates

Inflation is running high and interest rates are going up, with the outlook of 1,5% to 2% increase in the next 18 months. This will affect the mortgage interest rates. You have two options: a variable interest rate or a fixed rate. These are calculated based on the loan amount, the term of the loan and, in the case of fixed rates, the duration of the rate fix.
There is also a preferential Green Rate, applicable for homes with energy ratings of B3 or higher.

For more details see the EBS table of Interest Rates.

Cashback offers

EBS offers a 3% cashback on all non Green Rate Mortgage mortgages, paid in two installments: 2% on drawdown of the loan and a further 1% after five years.

Top tip for buying a home in Ireland

Don’t leave your mortgage planning to the last minute. “The sooner you contact us, the better,” says Denis Bastick, head of business development at EBS. “We will be able to advise on how much you’ll need, what you need to save and prove, interest rates, deposits, stamp and legal fees and more. Once you know what is required, we will help you create a plan to secure your mortgage, such as paying down a loan or paying off a credit card.”

Did you know?

• The maximum term for a mortgage is 35 years, regardless of your age.
• A mortgage ends when you turn 68. So, for example, if you’re 40 you can take up to a 28-year mortgage.
• The biggest stumbling block to getting a mortgage is the deposit. As a resident in Ireland you need 10% as a first-time buyer, 20% as a second-time buyer and 30% as a non-resident holiday-home buyer.
• Remember to factor in your relocation costs when moving to Ireland. It seems obvious, but it’s often an oversight.
• Superannuation and tax refunds – do not forget when you leave Australia you may qualify for a tax and superannuation refund. If you have been living Down Under for a while, this can be a tidy sum and many people use this to put towards buying a home. Read more about your Australian tax refunds in our blog.

View interest rates here https://bit.ly/nexventur-mortgage-rates-ie

Book your free consultation now and let’s help you get started on your next adventure.