The government has pushed hard in recent years to bring professional workers back into Ireland, welcoming plenty of new construction and dozens of foreign tech companies into the docklands. With many talented workers finding jobs elsewhere in the EU and in countries such as USA and Australia in the aftermath of the financial crisis, it is essential to Ireland’s future as a highly advanced and modern nation that its own professional workforce be well employed at home. Well government initiatives have already seen great success, many returning expats are faced with various complications when attempting to bring their families back home. Amongst these complications is the difficult process these Irish citizens have to go through to get mortgages.
Expats currently working and paying tax in another country are considered non-residents. Thus in the books of most major lenders, they are segregated from all other Irish citizens and placed into similar categories as foreign nationals. Thus, returning expats face stricter limits on income and on Loan to Value ratios when apply for a mortgage. Banks are meticulous in examining their flow of income. Bank of Ireland requires a minimum income of €75,000 for sole applicants and as much as €125,000 for joint applications. Other banks institute similar requirements. Further restrictions come in the form of Loan to Value (LTV) lending limits. For an Irish person living in Ireland, a typical deposit would only have to 10% of the value of the property for first time buyers, and 20% for non-first time buyers. Expats however, as treated as if they were investment buy-to-let buyers, and slapped with maximum loan to value ratios of 70%. For those professional workers returning home, this could means having to deal with rocketing rents while saving up for a deposit on their mortgage.
To make matters worse, many banks, such as Permanent TSB and KBC, will not lend to those living outside of the EU. AIB refuses to lend to applicants dependent on more than one non-euro income, making it difficult for spouses to apply together. These lenders often cite regulations on monitoring exchange rate fluctuations for rejecting borrowers earning income in a different currency, adding to an expat’s burden when looking for a mortgage in Ireland.
The good news is that expats are still left with a couple options when looking to buy a home in Ireland. Those with strong Irish connections and those who have accounts with Irish banks are likely able to negotiate better terms. Often times, banks are also willing change a non-resident’s mortgage to lower home-loan rates once they return to Ireland and live on their property. Even so, returning workers still face mountains of paper work to prove their permanent residency and various other administrative and regulatory difficulties.