Advice needed on renting out home but I dont want to lose tracker rate ?

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rath1

Guest
Hello.

Im having some bother about renting out my home. My job is not looking so good lately and I have some debt that I am strugling with. So I decided im going to move home for a year to 18 months and let the house out in order to pay off these debts.

I rang my bank to see what restrictions there are if I rent the house out and they said they would take me off my tracker mortgage and put me on a higher variable rate mortgage. And they also said I could not go back to my tracker mortgage. It seems a shame to lose my tracker mortgage for the sake of a year.

Any advise is much apprciated or if anyone knows of a way to avoid losing my tracker.

Regards.

Ian
 

diver

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179
Re: Advise needed on renting out home but I dont want to lose tracker rate ?

Unfortunately you will lose your tracker, most banks won't even put you on a standard variable rate as it's now deemed to be an investment property.
I feel you have two options:
1. Visit the bank in person and explain your predicament....you may be able to negotiate a more favourable rate
2. Remain in your property and rent out some rooms under the rent a room scheme.

I would be very reluctant to give up your tracker mortgage, it's exactly what the banks want us to do!

Good luck
 

dubrov

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Messages
134
Re: Advise needed on renting out home but I dont want to lose tracker rate ?

Check our mortgage terms. If it doesn't say you need to inform them of a change in circumstances you have no obligation to tell them that you ae renting out the house.

As long as you continue to pay the mortgage, the bank won't come knocking anyway.
You'll need to tell the revenue to stop TRS if ou are receiving it though.

If you have equity, it might be worth trying to sell the house and still moving home.
 
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rath1

Guest
Re: Advise needed on renting out home but I dont want to lose tracker rate ?

Thanks for the replies guys. I really dont want to lose the tracker and will try anything to avoid it.

Can anyone tell me how the bank will know the house is rented out if I say nothing to them. Will they know when my mortgage relief is gone ? Or how will they find out ?

Thanks
 

eirefinq

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66
Re: Advise needed on renting out home but I dont want to lose tracker rate ?

Your bank only cares if the mortgage is paid at the end of the day. I dont understand why you asked them the question to begin with? If the mortgage is paid every month your bank will be happy - bottom line. The revenue would be interested though if you dont register with the PRTB and pay any tax due on the rental income less expenses, interest etc.
 

ccraig

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359
Re: Advise needed on renting out home but I dont want to lose tracker rate ?

you dont need to tell them, dont cause unnecessary hassle for yourself
 
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opelcorsa1

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Re: Advise needed on renting out home but I dont want to lose tracker rate ?

ohmygod I didnt know this.. I have a tracker mortgage too. nightmarrrre
 
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opelcorsa1

Guest
Re: Advise needed on renting out home but I dont want to lose tracker rate ?

you need to change your insurance if you rent it out, when you do that your mortgage company will know?
 

WaterSprite

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1,311
Re: Advise needed on renting out home but I dont want to lose tracker rate ?

If you cancel TRS on the mortgage account, that would also be a flag to the lender. If the tracker rate is dependent on you living in the property and it's vital to you to hold on to the tracker, I wouldn't chance moving out in the hope that they won't find out.

Can you rent out a room instead and stay in the house?
 

dereko1969

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2,653
Have you checked out rents in your area? You'll need to be aware that, like sales, these are only asking prices - people are generally not paying the rents sought.

You will then need to factor in prtb registration, vacant periods, hassle, increased cost of insurance, etc

I'd do like watersprite suggests and see if renting a room might make more sense.
 

murphaph

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1,136
Just to relay my circumstance. Was on owner occupier tracker, cancelled TRS, moved primary a/c with same bank to another address, got landlord's insurance and registered with PRTB. Still on tracker 2 years later. I'll take my chances and I'm sure there are thousands out there in the same boat. I doubt the banks have, or are willing to deploy the resources to "catch" people who are actually paying the mortgage back as agreed. The banks are most probably glad that somebody is able to repay their mortgage!
 

WaterSprite

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1,311
Just to relay my circumstance. Was on owner occupier tracker, cancelled TRS, moved primary a/c with same bank to another address, got landlord's insurance and registered with PRTB. Still on tracker 2 years later. I'll take my chances and I'm sure there are thousands out there in the same boat. I doubt the banks have, or are willing to deploy the resources to "catch" people who are actually paying the mortgage back as agreed. The banks are most probably glad that somebody is able to repay their mortgage!
That's also my case - have stayed on tracker since the summer, even though the bank is well aware of my moving to another property. I'm taking this as pure luck and will be happy for as long as it lasts, but am fully expecting the rate to be changed at some stage.

Some banks will be more keen to check up on trackers. I'm with NIB, who I'd say would be keen to get me off my (0.5%) tracker, but because of their recent staff cuts, as you say, they may not have the resources.

Glad to hear that you've gotten at least two years out of it!
 

murphaph

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That's also my case - have stayed on tracker since the summer, even though the bank is well aware of my moving to another property. I'm taking this as pure luck and will be happy for as long as it lasts, but am fully expecting the rate to be changed at some stage.

Some banks will be more keen to check up on trackers. I'm with NIB, who I'd say would be keen to get me off my (0.5%) tracker, but because of their recent staff cuts, as you say, they may not have the resources.

Glad to hear that you've gotten at least two years out of it!
I even went so far as to request a certificate of interest paid for year ending 2008 from them and they never batted an eyelid, Ulster Bank fwiw. I don't think they care so long as the money is being repaid. They would presumably only be likely to switch your rate if they did prove that you were no longer living there and if they wanted to recoup lost revenue would have to sue you for it.
 
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opelcorsa1

Guest
I have secured and tennant and deposit but havnt signed anything or registered with prtb yet as I dont know whether to just give the deposit back and stay put. im worried that it will cost me much more to rent it out properly and then ill lost tracker mortgage on top, i have a .5% too.
 

galleryman

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168
was looking at same issue myself, as I went onto a tracker also after my first year variable finished a few years ago.

Just looked at my original mortgage T&C and it states
"Lettings:the borrowers are prohibited from granting any tenancy on the property being acquired. The property shall have vacant possession on acquisition"

does that mean I simply can't rent it out?

in respect of my tracker, that was simply a letter asking to switch, no new contract signed.
 

WaterSprite

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1,311
was looking at same issue myself, as I went onto a tracker also after my first year variable finished a few years ago.

Just looked at my original mortgage T&C and it states
"Lettings:the borrowers are prohibited from granting any tenancy on the property being acquired. The property shall have vacant possession on acquisition"

does that mean I simply can't rent it out?

in respect of my tracker, that was simply a letter asking to switch, no new contract signed.
I think that clause means that the tenancy can't be granted as part of the acquisition - so if e.g. there was a sitting tenant prior to purchase, it could not be a condition of purchase that the tenant could stay. The terms relating to renting out are usually referred to where they discuss that the house must remain your PPR, or there may be a reference to "owner occupier" - have a look for that in the mortgage terms & see if it's there.
 

galleryman

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168
that makes more sense.

In the T&C for the mortgage, No there is no mention of PPR or requirement to notify bank if change of use for property. Only reference is that listed above regardings "Lettings".

This was not a mortgage to purchase the property, it was a refinance done 3 yrs after buying the house. The only special requirement seems to be that we clear the old mortgage. 1 yr later we instructed the bank to move us to a tracker when our 1yr fixed rate ended. No new documents were ever sent out to us re moving to the tracker, we only got a revised repayment schedule showing the new monthly repayment.
 

daymoh

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51
I'm in a similar position as the OP. I'm on a tracker and would like to rent out my property in a few months. I've owned the property for 4 years.

I explained my case to my bank (PTSB) and was told that I don't need to inform the bank as it doesn't affect my mortgage. My mortgage won't change from a tracker. I was told that the only people I need to infom are the Revenue.

Is this standard with PTSB? Why do other banks care that you're renting out your house?
 

Kine

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I may be in a similar postion in a few months, this thread makes an interesting read.
 
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eddiej

Guest
Does anyone know which banks are likely to switch mortgages from trackers to variable or standard rates when the house is rented out?
 
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