Buy-to-let mortgage on residential rates

Hi folks, I have 3 houses unforunately. One that I live in and two investment properties. 1 is rented and 1 is not. All are on residentail rates can the bank (AIB) force me onto commercial rates? I applied for interest only on all 3 mortgages but they would only allow me to go on interest only on my PPR. They have threatened me that I will be put onto the commercial rate on the rental properties. Total mortgage value is 453K actual value of properties is 200K. I am meeting all repayments but have no quality of life. Any advice on this would be greatly appreciated.

Hi

The Mortgage Arrears Code applies only to homes, so they cannot use the fact that you are in arrears to move you onto a higher rate.

If you are in breach of your contract on the investment properties by being in arrears, they can restructure the mortgage with a higher rate. were doing this to get people off trackers, but they seem to have suspended their plans.

If you are unable to make your repayments as they fall due, you might have to consider bankruptcy. This would give you a fresh start.

Brendan

Cheers Brendan, I was thinking that they could not move me onto a higher rate but they are actually still threatening it. I want to keep repayments up on the investment properties becuase if I breach the contract they have a right to change the terms and conditions. I am on a fixed rate with my PPR of 3.86% but want to go onto the standard variable rate but they say that I cannot do that and that I must go onto a new LTV rate which would be a lot highr as I am in negative equity.

As per the previous response once you are unable to keep to the terms of your loan agreement the Bank can re-negotiate the pricing. To be fair, the priority of most banks now is to protect the loan rather than maximise pricing. I.e. If you are a poor credit risk you are less likely to be given a rate increase. It's a negotiation scenario. Talk to the Bank aboput full co-operation in return for no increase in rate.

Because I am in so much negative equity, the threat that AIB can increase the rate to commercial rates, the risk of more pay cuts, I am thinking of moving to the north and going bankrupt.

I know that might sound like a bad thing to be doing but I feel AIB are dragging their feet every oppurtunity they get and they are quiet happy to leave me high and dry so why wouldnt I do it to them.

I don't think it's a question of "doing it to them".

If you are insolvent i.e. unable to pay your debts as they become due, and you can move to the North, then you should do so.

I am very nervous of moving to the north because I have a good public sector job. Can the banks keep stopping wages on me indefinitely if I live in the north and work in the south.