buying property in northern ireland

[isobel]

I am thinking of buying a proberty costing 150k stg in my home town in northern ireland.The property will be used as a holiday home and one of the rooms may be rented out occassionally I have a lot of equity in my home in Dublin. The interest rates in northern ireland are a lot higher than in the south. Should I just borrow on the equity on my home and take the hit on the stg rate or should I borrow some of the money in northern ireland?

 

[Glenbhoy]

If you borrow the money in th north you also leave yourself exposed to adverse currency fluctuations. I would suggest there are few upsides to borrowing in the north (presumably you have already checked that borrowing money in the north is a viable option), interest rates are much higher, you could probably get an even better rate in the south anyway as loan to value may be quite low and you know what the repayments are each month.

 

[rodger]

Good question:

There are advantages to borrowing in north:
1. you can use the rental income directly against the loan
2. The purchase will be vetted by the lender and title will be more "certain"
3. no currency exchange fees

The advantages to borrowing in south
1. lower interest rates, for now
which would imply in theory that the exchange rate is going to improve for Sterling but not necessarily
2. possibly no legal fees

So whatever you decide to do is a gamble on exchange/interest rates