Expat Mortgages Ireland: Top Tips For Non-Residents & Irish Citizens Returning Home
When the Irish Times announced that the Bank of Ireland would stop offering mortgages to expats, non-residents, and Irish people living overseas, many expats believed that they would never realise their dream of owning a home in Ireland.
The EU Mortgage Credit Directive introduced in 2016, which restricted lending in foreign currencies, made the possibility of securing an expat mortgage even more unlikely. But there is light at the end of the tunnel for Irish citizens who want to buy a home at home, and with the right mortgage broker and expert advice from Expat Taxes, Ireland’s leading expat tax advisors, you can get a mortgage in Ireland.
In this complete guide to Expat Mortgages in Ireland, we’ll explain everything you need to know about buying a home as a non-resident or returning resident and provide you with top tips on how to stay on the right side of Revenue while maximising your rental income potential.
What You Need To Know About The EU Mortgage Credit Directive
Before we look at what you need to apply for an Expat mortgage in Ireland, we need to understand the parameters of the European Mortgage Credit Directive. Adopted by the European Commission in 2016, the directive aims to integrate the EU market when it comes to mortgage credit by promoting common standards across the union and restricting irresponsible lending in one country that could have consequences in another.
Like most EU directives, its focus is to ensure a high level of consumer protection but, it can make finance sourcing extremely difficult for Expats living outside the eurozone and earning in foreign currencies such as British Pounds or Australian Dollars.
It puts additional obligations on EU and Irish mortgage lenders too and, as a result, many banks such as Permanent TSB refuse to consider Expat applicants who earn non-euro currencies. You can overcome this with the help of an experienced mortgage broker, who will help you find a reputable lender who will consider your application, and put you in touch with expat tax advisers who can help you overcome common financial pitfalls.
Applying For An Expat Mortgage In Ireland
There are complex criteria when it comes to applying for expat mortgages in Ireland and, unless you are residing in the country at the time of application, and have been living there for at least six months, the following conditions will apply to you:
- To apply for an expat mortgage in Ireland, you must be buying it intending to move back and live in the property, or buying it as a holiday home.
- You must have been in continuous employment for at least 1-year and will need proof of income from your employer.
- Irish banks will only loan you 65% of the purchase or valuation price (whichever is lower), and so you must raise a deposit of at least 35% of the total purchase price. As the minimum expat mortgage approval amount is €100,000, you need a deposit of €35,000 plus additional funds to cover costs such as stamp duty and legal fees, for lenders to consider your application.
- The maximum loan term for expat mortgages in Ireland is 25-years, and the maximum age for mortgage completion is 65-years, so this is something to consider when applying.
- You need to earn a good income. Most banks in Ireland consider mortgage applications on a case-by-case basis, and per Central Bank guidelines but, if you want them to approve you for an expat mortgage, you should earn at least €75,000 in the case of a single application and €125,000 for joint applications.
- You will need to take out a life insurance policy if you do not have one already, and you will be required to show proof of house insurance (obligatory in Ireland) upon completion of the sale.
Non-Resident Mortgage Paperwork
As you can imagine, there is a lot of paperwork involved in applying for an Expat mortgage. Here we list some of the documents that you may need, although as every mortgage application is unique, your mortgage advisor will tell you what they require to get a favourable answer from the lender:
- Completed mortgage application form
- Last six months bank statements for all accounts both in Ireland and overseas
- Last six months credit cards statements for all cards issued in both in Ireland and overseas
- Letter from employer confirming your duration with the company and annual salary
- Last three payslips
- If less than 3-years overseas, your last Irish P60
- Copy of your current rental agreement, lease agreement, or mortgage
- Copy of utility bill issued within the past 3-months to your current address
- Copy of Passport
- Proof of 35% deposit
You may also need a credit report from the country in which you reside, and further confirmation of employment such as your contract and a CV listing your academic and professional qualifications, but this varies from bank to bank.
Professional Financial Advice & Support
If you are an expat returning to live in Ireland, you are going to need financial advice from an expatriate tax specialist such as Expat Taxes, in addition to support from an Irish mortgage broker, if you are to buy your dream home and re-establish your tax residency position.
Laws and legislations change all the time, and it can be confusing to understand your tax obligations and financial responsibilities when moving to a different country, even if it is one that you used to call home.
Expat Taxes offer specialist tax advice to Irish Expats returning home, and they provide a tailored service to suit individual requirements. Whether you are looking for advice on renting your property in Ireland while you are overseas, information on double-taxation rules within the EU, or professional guidance on how to get your tax affairs in order when returning home after a placement abroad, these specialists can help.
The good news is that with the right team behind you, you can get a non-resident mortgage in Ireland and repatriate without moving in with parents or renting accommodations. And with Irish interest rates at an all-time low, the timing has never been better to move back to the Republic and into a home that you can call your own.