ptsb Buy to let mortgage review after 12 years

Deaneo said:
Hi,

I saw your post & am in the same situation - I received a similar letter with the same options. What was their focus in your communications with them by phone and did they threaten you with a switch to Capitol & Interest payments?
Thanks
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I phoned and they were actually very helpful. They did not threaten to switch me to Capital and Interest.
 
suicra05 said:
I phoned and they were actually very helpful. They did not threaten to switch me to Capital and Interest.
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Hi,

Many thanks for your reply. I contacted them (by phone) and they clarified what they needed & their position. Their focus seems to identify mortgages that are in bad shape (negative equity) and in need to additional resources in order to secure the debt(s) in question. We agreed to disagree on some issues and I await their review outcome. Like you there will be similar follow-up reviews every 2 years or so.

I also asked if PTSB are likely to encourage customers to clear mortgages & offer discounted full & final settlements? No was the current position so I suggested Management should re-consider this as an option for those who have the means...
 
Hi,
I am in a somewhat similar position having received the same letters, being 14 years in to 25 year int only trackers regarding four investment residential properties.
I filled in the forms, along with valuations from recent sales taken from the price register which showed I was at about break even, not in negative equity but not positive either. I explained that I wanted to stay on interest only and expected capital appreciation over the next 10 years to give some equity plus I would be at retirement age and intended downsizing my by then mortgage free PPR. They decided my situation was unsustainable
and have asked me to voluntarily surrender or sell all four properties! Their reason being that my loan to values are greater than 75 %. The loans were originally agreed on 80% loan to values. The loan to values are currently at their best over what they have been over the last decade so why , after 15 years without missing a payment are they being so heavy handed?
 
@Aardvark

Default rates on BTL properties in Ireland are appalling. My guess is that these mortgages are not very profitable for them given the risk weights attached.

Ironically there was no point asking you to sell when the properties were in negative equity, but there is now that you are no longer underwater!

Can they oblige you to sell the properties? I am not the expert but suspect it's a bluff on their part. Once you continue to service the mortgages I doubt they will take legal action.
 
NoRegretsCoyote said:
Can they oblige you to sell the properties? I am not the expert but suspect it's a bluff on their part. Once you continue to service the mortgages I doubt they will take legal action.
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There's a clause in standard PTSB BTL contracts (clause 7) that allows them to revert the mortgage to capital & interest. That might make the mortgages unsustainable, forcing the borrower into default.
I can't find a full contract to check all the clauses at the moment, but I definitely wouldn't assume it's a bluff without checking all the clauses they're relying on.
 
This article in the Times might be relevant:

The State’s former top mortgage lender highlighted this week, as it reported its full-year results, that 17 per cent of its performing mortgage book – equating to about €2.6 billion – is made up of loans doled out during the boom years where borrowers only have to meet interest payments until the loan period comes to an end. At that point, the principal falls due at once.

The bank has begun to ask borrowers how they plan to make these end-of-term payments so it can assess what level of defaults can be expected from the portfolio.

And even though borrowers may continue to meet their loan arrangements, the bank, under rules brought in following the financial crisis, may have to start classifying interest-only mortgages as non-performing loans (NPLs) if borrowers don’t come back with credible capital repayment plans.
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Aardvark said:
Hi,
I am in a somewhat similar position having received the same letters, being 14 years in to 25 year int only trackers regarding four investment residential properties.
I filled in the forms, along with valuations from recent sales taken from the price register which showed I was at about break even, not in negative equity but not positive either. I explained that I wanted to stay on interest only and expected capital appreciation over the next 10 years to give some equity plus I would be at retirement age and intended downsizing my by then mortgage free PPR. They decided my situation was unsustainable
and have asked me to voluntarily surrender or sell all four properties! Their reason being that my loan to values are greater than 75 %. The loans were originally agreed on 80% loan to values. The loan to values are currently at their best over what they have been over the last decade so why , after 15 years without missing a payment are they being so heavy handed?
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Hi
What has happened since you were advised to sell the 4 properties? Did they give you an option to increase repayments to part capital & interest ! I just submitted my paperwork
Any update would be appreciated
Thanks
 
I would be curious to hear too. I submitted my paperwork about a year ago. They decided I had the ability to pay (but I am pretty confident that if an individual applied for a new mortgage of a similar amount with my income they would be declined!). Anyway I pointed out that they should have come back 8 years previously when the 5 year interest only period was up and I also reminded them that I had volunteered to pay off a small amount of capital every month in 2013 but was refused that option. They couldn’t find any correspondence on their system in this regard and the branch I dealt with is now closed. To achieve closure I offered half of the monthly amount of capital they were seeking. They turned that down and I have not heard from them since so as it stands I am still on interest only.
 
George12 said:
I would be curious to hear too. I submitted my paperwork about a year ago. They decided I had the ability to pay (but I am pretty confident that if an individual applied for a new mortgage of a similar amount with my income they would be declined!). Anyway I pointed out that they should have come back 8 years previously when the 5 year interest only period was up and I also reminded them that I had volunteered to pay off a small amount of capital every month in 2013 but was refused that option. They couldn’t find any correspondence on their system in this regard and the branch I dealt with is now closed. To achieve closure I offered half of the monthly amount of capital they were seeking. They turned that down and I have not heard from them since so as it stands I am still on interest only.
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Well that’s interesting you never heard back .. I hope the same happens to me ! I am so worried over it .. I have 6 in the portfolio .. can I ask how many you have .. I just noticed from various threads people with one property in negative equity seem to be kept on interest only and portfolios in positive equity are refused.. they told me they need 25% ltv which is way to high
 
Isobel said:
Well that’s interesting you never heard back .. I hope the same happens to me ! I am so worried over it .. I have 6 in the portfolio .. can I ask how many you have .. I just noticed from various threads people with one property in negative equity seem to be kept on interest only and portfolios in positive equity are refused.. they told me they need 25% ltv which is way to high
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Can you give details of the properties, loans, amount outstanding, rates, maturity dates,rental income etc. Can give advice with full information.
 
I may be wrong but from the tone of these posts some BTL interest only holders have been using the income to fund lifestyle. I am basing this on what seems to be the ineligibility to switch to capital repayments or ability to meet shortfalls if mortgages are sold.

The big question I have is when you eventually have to repay the mortgage you're going to lose that rental income, can you survive without it?
 
Some advice please.
I'm after getting a review request from the bank on an interest only BTL mortgage i got many years ago, we are half way through the term approx.
Firstly i wasn't expecting to get this but they want to offer to move me to capital payments or see what my plan is to pay if off when the time comes,
I have assets to cover the mortgage but they send me a form to say its our primary residence (we are currently living in the property but plan to rent it out again soon)
I'm suspicious that if I sign that form that we will lose the BTL Interest only tracker mortgage, is there a period of time i can live in my btl without having to change the mortgage?
Has anyone any other advice as to how to proceed.
 
If you have a home loan and you let it, you could have to move from a home loan rate to a buy to let rate.

I have not heard of someone on a buy to let rate being reviewed because they are now living in it.

Again, check the contract. It's very unlikely that it says that they can remove the tracker if you live in it.

Brendan
 
So, is a reasonable summary of this thread the following:

ptsb wants to make sure that you will be able to pay off the loan when the term ends.
If you can show them that it's in positive equity or that you have other assets, they will be happy and won't switch you to capital and interest.
If you are in negative equity and can't show them how you will pay off the loan, they will ask you to sell the property as the mortgage is not sustainable.
In either case, they could switch you to capital and interest under the contract, in which case you would either have to pay or go into arrears.
You could challenge their right to switch you to capital and interest.

Basis of challenging their right to switch you to capital and interest
While the contract is clear that they can do a review after 3 years, the illustration was for a one off payment at the end of term.
 
Brendan Burgess said:
So, is a reasonable summary of this thread the following:

ptsb wants to make sure that you will be able to pay off the loan when the term ends.
If you can show them that it's in positive equity or that you have other assets, they will be happy and won't switch you to capital and interest.
If you are in negative equity and can't show them how you will pay off the loan, they will ask you to sell the property as the mortgage is not sustainable.
In either case, they could switch you to capital and interest under the contract, in which case you would either have to pay or go into arrears.
You could challenge their right to switch you to capital and interest.

Basis of challenging their right to switch you to capital and interest
While the contract is clear that they can do a review after 3 years, the illustration was for a one off payment at the end of term.
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Thanks Brendan
I spoke with them yesterday and that’s exactly the process ..
 
Dublinbay12 said:
I may be wrong but from the tone of these posts some BTL interest only holders have been using the income to fund lifestyle. I am basing this on what seems to be the ineligibility to switch to capital repayments or ability to meet shortfalls if mortgages are sold.

The big question I have is when you eventually have to repay the mortgage you're going to lose that rental income, can you survive without it?
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Absolutely not the case for me
The mortgage were granted on the basis of interest only for the term .. it’s not funding lifestyle .. from the initial draw down the rents would never have covered full capital
My portfolio is working well and additional profits are constantly re invested in the properties keeping them to an excellent standard and that’s why my tenants are with me more than 10 years plus .. I offer very fair rental rates .. a lot lower than market value as a good tenant is invaluable.. it works both ways
Dublinbay12 said:
I may be wrong but from the tone of these posts some BTL interest only holders have been using the income to fund lifestyle. I am basing this on what seems to be the ineligibility to switch to capital repayments or ability to meet shortfalls if mortgages are sold.

The big question I have is when you eventually have to repay the mortgage you're going to lose that rental income, can you survive without it?
Click to expand...
 
Isobel said:
My portfolio is working well and additional profits are constantly re invested in the properties keeping them to an excellent standard and that’s why my tenants are with me more than 10 years plus .. I offer very fair rental rates .. a lot lower than market value as a good tenant is invaluable.. it works both ways
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Re-investing all profits in the properties and keeping rents a lot lower than market sounds like a poor, if not unviable business model.
 
Isobel said:
Absolutely not the case for me
The mortgage were granted on the basis of interest only for the term .. it’s not funding lifestyle .. from the initial draw down the rents would never have covered full capital
My portfolio is working well and additional profits are constantly re invested in the properties keeping them to an excellent standard and that’s why my tenants are with me more than 10 years plus .. I offer very fair rental rates .. a lot lower than market value as a good tenant is invaluable.. it works both ways
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Should you not have the capacity to repay the mortgages then? A viable business should have the ability to repay its debts or have a plan in place to liquidate some of the assets to cover debts as they mature.

If rents do not cover capital, it seems like these are not viable properties?
 
I concur. How do u intend paying for the mortgage at end of term.

In my experience the time to invest in yr property is when tenants are moving out or you are selling it or there's a problem.

It doesn't sound sustainable at all what you are doing to me.
 
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