You used to hear a lot about banks offering mortgages to people looking to buy across the Border but everything I see online appears dated. Can you tell me whether I can get a mortgage to buy a second home in Northern Ireland when I live and work in the Republic?
Ms A.O’N., Twitter
With all we’re hearing about Northern Ireland being part of the European Union for trade purposes and the long history of people living and working across the Border, you’d have thought that there would be a fairly well-oiled protocol for mortgages across the line on both sides of the Border.
Apparently not. Or, at least, not now.
Very simply, you will not get an Irish lender to fund a mortgage for a property in Northern Ireland. We did a quick ask around all the main lenders in case we were missing anything but the answer from those who got back to us was uniform – thanks, but no thanks.
It's not so much the banks themselves, I gather – though I imagine they'd be wary enough given the difficulty of enforcing security across jurisdictions. AIB put it succinctly: "As a result of updated regulatory guidance post-Brexit, consumers wishing to avail of a mortgage in Northern Ireland need to be resident in the UK rather than the Republic of Ireland."
Bank of Ireland agreed, adding that "for Northern Ireland, we only accept a BTL [buy-to-let] application if the applicant is a UK resident and owner/occupier in the UK".
Other banks gave similar responses – though it seems very complex for some to find an answer to what seems a pretty basic question. So you won’t have any joy betting an Irish lender.
Borrowing in UK
But what about the United Kingdom? That is certainly possible but don’t expect lenders to be rushing for your business. It’s a bigger market of course but most lenders tend to have a blanket bank on lending to people who are not resident in the UK.
I gather that Barclays and NatWest – the UK parent of Ulster Bank – are among the high street banks willing to consider applications from EU residents for a mortgage on a UK investment property. There might also be some specialist lenders in what is very much a niche market. There are certainly a lot of brokers out there assuring people that there are options open to them.
My experience is that brokers are boundlessly optimistic for business but can often struggle later with applications that do not fit the standard template. However, in a market like the UK – where there is a substantial investment demand from expats – there must be some brokers who specialise in this kind of business.
Like at home, any lender will want to know your circumstances – your income, how secure that is, any outstanding financial commitments (including on your home here) and personal details such as your age.
They will also be interested in your credit score to help them assesses what sort of credit risk you are. And the issue here, I gather, is that credit ratings are national. So any solid credit rating I assume you have built up here in Ireland if you’re looking to buy a second property won’t necessarily be any good to you with a UK lender.
Against that, the mortgage will be secured against the property in Northern Ireland, so, unlike banks down here, there won’t be any concern about accessing the security if things go wrong.
My guess is that if you can find a UK lender, they will be cautious in assessing your net available income to meet the cost of this investment and in assessing your credit risk. The likelihood is that you will not be able to secure as large a mortgage as a UK resident would – or that you could secure for a second property in the Republic.
You’ll also likely pay a premium for the loan – over and above the generally higher rates on offer for buy to let properties, given the riskier nature of the transaction for the bank.
