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

Bronte

Frequent Poster
Messages
13,368
FTB, check your terms and conditions first to find out if you would lose your tracker.

In any case the bank will not know you have rented.

TRS/mortgage interest relief for homeowners has nothing to do with the bank. You just inform revenue. The tax relief you will get for renting is worth more.

Another poster mentioned the bank checking the PRTB register. It's hard enough to read it so come on bank staff are not doing this.
 
F

FTBtracker

Guest
Hi,
Thanks for your reply.
On the PRTB register, this is worrying. Is it a publically accessible register?
Ie. Can the banks scan it for properties owners they have that are on Trackers?

On the TRS. Am I correct in saying it runs off after 7 year for FTB’s? I am actually in year (6).There is then no TRS after that?

Is there anything in the new Code of Conduct on Mortgage Arrears regarding banks not being able to take people off their trackers if they have to rent the PPR our due to work/family and cant sell?
I am not in arrears, but would be surprised it this big issue has not been addressed by the Government to date effectively.
Or maybe Im not surprised if it has not been addressed…
Thanks Rob

 

csirl

Frequent Poster
Messages
2,162
Hi,
Thanks for your reply.
On the PRTB register, this is worrying. Is it a publically accessible register?
Ie. Can the banks scan it for properties owners they have that are on Trackers?

PRTB register is public - you can view the addresses of all rented properties in the State on their website.
 

walletpod

Registered User
Messages
35
I'm in the same boat as the OP. Moving abroad for a better salary so I can afford to pay back my mortgage.

We are moving in 6 weeks. In the process of manicuring the property so that it is attractive to prospective tenants.

Will cancel TRS, register with the PRTB and will pay NPPR when applicable. My main worry is with my (valuable) tracker mortgage.

We put an anonymous call to our mortgage provider this afternoon to pose the question: will we lose our tracker mortgage if we rent out our property. Our mort. provider said predictably "yes you would". However, we mentioned that we have reviewed the mortgage offer letter (signed), and no where does it mention that we would lose our tracker if the property was not our PPR. Having heard this, the mort. provider still said that we would lose the tracker.

I'm pretty sure that if it is not explicity mentioned in the mortgage contract, then the mort. provider cannot remove the tracker rate. But now I'm nervous. Should I seek a second opinion, and is there an independant agency that can look over our mort. contract to confirm my understanding (MABS?).
 
F

FTBtracker

Guest
Hi,
I send an alias email to my mortgage provider asking the same question.
They have so far failed to confirm in writing that I would not loose my Tracker if the house were no longer my PPR. Even though I mentioned if I do not take the new job in another county I will go into arrears anyhow. Surely it is better I move, rent it out and pay my mortgage.
It is a Catch 22 that is very serious and all PPR Tracker holders in this position need a definitive answer to this important question.

I do believe we need another option on this, as most Tracker holders underestimate the risk of losing the tracker and the associate costs if they move. The interest rate difference would be likely a few percentage points On a €500k mortgage this would be around €800 more a month in the interest difference cost !
Would make you think twice about rent out the PPR to take a new job and keeping the economy going!!
Alas, I feel that most politicians are not in this position as they are mostly not negative equity-private sector works in their early 30s. This is not a major issue on politicians radars that they can even relate to.

I wrote to MABS and they just referred me to my mortgage provider.
I am going to email the Regulator directly to ask them this question regarding tracker mortgages if you have to move jobs and location to continue paying the mortgage and keep the country going.
I will revert when I hear.
Rob
 

walletpod

Registered User
Messages
35
Hi FTBtracker: I spoke to MABs over the phone and explained my situation (in that if we lose the tracker then we will absolutely fall into arrears). MABs were very helpful and pointed me in the direction of the "Code of Conduct on Mortgage Arrears 1 January 2011" which is widely available. In it is states the below important points for my case specifically (and from what it looks like above, your case as well) -

Primary Residence[FONT=Calibri,Calibri][FONT=Calibri,Calibri]: means a property which is:
(i) the residential property which the
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[/FONT]borrower [FONT=Calibri,Calibri][FONT=Calibri,Calibri]occupies as his/her primary residence in this State, or
(ii) a residential property in this State which is the only residential property owned by the
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[/FONT]borrower[FONT=Calibri,Calibri][FONT=Calibri,Calibri]. [/FONT][/FONT]
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[FONT=Calibri,Calibri][FONT=Calibri,Calibri]Pre-arrears[FONT=Calibri,Calibri][FONT=Calibri,Calibri]: A pre-arrears case arises where the [/FONT][/FONT]borrower [FONT=Calibri,Calibri][FONT=Calibri,Calibri]contacts the lender to inform them that he/she is in danger of going into financial difficulties and/or is concerned about going into mortgage [/FONT][/FONT]arrears[FONT=Calibri,Calibri][FONT=Calibri,Calibri].
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csirl

Frequent Poster
Messages
2,162
Walletpod, to give you some comfort.

I've a close relative with very similar circumstances to yourself.

Her mortgage offer letter/contract is silent on the issue of renting the property. All it says is that it is a residential mortgage i.e. for a residential property (as oppossed to a commerical premises). A residential property is still a residential property as long as someone is living in it - doesnt have to be the owner/mortgage holder. (Its possible you have the same provider - I'm PM you the name).

This bank is fully aware that the property is rented - the person went into their branch to get the postal address on the mortgage account changed as well as her other accounts to her new address. The property was also insured by the insurance wing of this bank and the insurance was changed to a rental property (which also required notification to the mortgage section of bank as they have an interest in the policy). To date, the bank does not seem to have a problem with the property being rented. If they were to raise the issue in the future, my relative would simply point to the mortgage contract and say that it is not a condition of the mortgage.


We put an anonymous call to our mortgage provider this afternoon to pose the question: will we lose our tracker mortgage if we rent out our property. Our mort. provider said predictably "yes you would". However, we mentioned that we have reviewed the mortgage offer letter (signed), and no where does it mention that we would lose our tracker if the property was not our PPR. Having heard this, the mort. provider still said that we would lose the tracker.
I get the impression that the PPR condition has not be used by many of the mortgage providers until recently. I think it may be included in more recent mortgages - maybe past 2-3 years, but I get the impression that it isnt in a lot of tracker mortgages that are older than this (as with my relative and your contract). When you rang up they didnt know who you were. As their current mortgage contract has the PPR condition, they would have given you the standard answer that this condition is included in their mortgages. I think that if they looked at your specific contract, they'd give a different answer.

However, my advice to you would be, if its not in your mortgage contract, then there is no reason to highlight the issue with the bank and there is nothing the bank can do about it.
 
F

FTBtracker

Guest
Thank you for your responses. It has provided me with a bit of assurance.
It is clear in the Jan 11 Code, if you own only 1 property it is defined now as your PPR.
It is not clear from the Code if you simply tell the bank you are at risk of arrears you are then covered by the Code for the rest of your mortgage term (ie cant loose tracker) –weather you end in arrears during mortgage life or not.
Basically, it is not clear if the Code covers those not actually in arrears.
I am hoping to fully continue paying principal and interest on my home when I take my new job. Albeit to take up my new job I will no longer be living in my house and I cant sell it.
It is not clear from the Code if the banks can still take tracker mortgages off people in this negative equity position who are not in arrears and have to move for job reasons to enable them to continue paying their massive mortgage.
The irony is on a €600k mortgage, if I was put on the Buy to let rate the extra interest of €800 a month would Definitely put me (and most people) in arrears, irrespective of my new job!

The fact the banks cast a blind eye to this, but are not prepared to state on the record for all in this position that they will not take the trackers off all those in this position at any time during the life of the tracker worries me considerably.
Unfortunately, my trust in Irish Banks got lost along ago. Just cause Banks turn a blind eye to it now, does not mean in 5/10 years that will hold the same blind eye. They may look to charge higher rates on those not living in their Tracker homes if the economic climate improves or if the Banks are not owned by the Government in the future.
This is why it really needs to be on the Record now for piece of mind over the life of the mortgage, before those on Trackers in negative equity living in their PPR move out..
I have now asked the Regulator for the Definitive answer to this pressing issue.
I will revert if I hear anything constructive.
Rob
 

jigsaw

Frequent Poster
Messages
92
hi FTBtracker

just wondered if you have heard anything back from the regulator on this issue? (i'm in the same boat myself)

cheers
 
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