Key Post Anyone lost their tracker or paid a higher rate because they rented out their home?

Brendan Burgess

Founder
Messages
40,231
This question is asked from time to time, so I thought it would be useful to look for hard evidence.

Can anyone confirm that they have actually lost their tracker or paid a higher rate because they rented out their home?

Can anyone confirm that they have told their lender that their home is let and the lender has confirmed that the interest rate won't change?

Have any of the banks made public statements on the issue?

Most loan agreements don't say anything on the issue, so the presumption is that they cannot increase the rate. A loan agreement may give the lender the right to increase the rate, but it may be their practice not to enforce this.

AIB
Mortgage contract from AIB also states that the mortgage rate is based on my home being my PPR, They confirmed, verbally that I would be moved to a buy to let interest rate and would lose the tracker.
Bank of Scotland
Has confirmed orally that they don't take people off trackers if they rent out their home.

National Irish Bank
Yes. You will lose your tracker. The loan agreement says so. You will pay the investment rate. They do enforce this.

permanent tsb
Probably not. At least one person has it in writing from them.

Ulster Bank/First Active
Nothing in the mortgage agreement. Have confirmed orally to people that they don't take them off trackers.
 

Brendan Burgess

Founder
Messages
40,231
Frank and Dec

Could you maybe read your mortgage loan offer and let us know if it says anything.

My understanding is the Ulster Bank don't charge extra, whether or not the agreement provides for it.
 

plant43

Frequent Poster
Messages
387
We had it verbally confirmed that UB do not take you off a tracker if you rent out your house.
 

Brendan Burgess

Founder
Messages
40,231
Hi plant

That is very interesting. Did you make a note of the conversation at the time? Did you note the name of the person? Did you raise the topic or did they?

Did you subsequently rent out your home? If UB knew this and did not raise the rate, then I think you are safe.

If it was recent, I would follow up with a letter or an email to them confirming the conversation. "As discussed, we have rented out our former home and we note that this will not result in our paying a higher mortgage rate. We have advised the insurance company that the home is now let".
 

mrblues

Frequent Poster
Messages
192
BOSI confirmed twice verbally to us that they wouldn't remove our tracker should we rent out the house - once in May '10 and again last month.
However they won't put it in writing or acknowledge receipt of us putting it in writing to them.
In the recent conversation I asked for it to be posted as a note on our account detail but who knows if that actually happened.
 

cork_south

Frequent Poster
Messages
17
I rang TSB this morning to find out what would happen if we rented out our home. We have a tracker with TSB.
The girl in the mortgage department said she could not tell me what would happen to my tracker if we rented out our home.
She also said TSB would never ever send out a letter confirming that you would keep your tracker if you moved out of your home :( and she will send on a letter during the week with more information.

Could anyone that has a tracker with TSB, who got a confirmation letter from them that their tracker would remain untouched if they moved out, possibly let me see the contents of the letter with all personal details removed?
 

plant43

Frequent Poster
Messages
387
Hi plant

That is very interesting. Did you make a note of the conversation at the time? Did you note the name of the person? Did you raise the topic or did they?

Did you subsequently rent out your home? If UB knew this and did not raise the rate, then I think you are safe.

If it was recent, I would follow up with a letter or an email to them confirming the conversation. "As discussed, we have rented out our former home and we note that this will not result in our paying a higher mortgage rate. We have advised the insurance company that the home is now let".
Hi Brendan,

It was last year when we asked when we were thinking of moving abroad. The move didn't materialise so we didn't pursue it any further.

We also checked our loan agreement and there is no clause about being moved off the tracker rate if the house is rented out.
 

candyman

Frequent Poster
Messages
165
On an AIB tracker and had a "hypothetical" conversation with them a number of months ago re renting out our home. They confirmed, verbally that I would be moved to a buy to let interest rate and would lose the tracker.

Mortgage contract from AIB also states that the mortgage rate is based on my home being my PPR, which is another way of saying, if you move on from this house, your mortgage rate maybe changed also. A very restrictive clause it has to be said!
 

Brendan Burgess

Founder
Messages
40,231
Hi Candyman

That is very interesting information. I would love to know if anyone has actually let out their home, informed the bank and lost their tracker. Sometimes the mortgage contracts give the lender the power to do something, but they don't actually enforce it.
 

jigsaw

Frequent Poster
Messages
92
I took out a tracker mortgage with first active/ulster bank in Feb 2007. My tracker is ECB + 1.15%

I will need to rent out my property soon and considered not telling the bank but after learning that every rental property in Ireland (eventually) ends up on the PRTB's website I wasn't willing to take the risk in case I got moved to a higher rate if the bank ever checked the PRTB website to cross reference rental properties against their customers who are on trackers.

I checked my mortgage contract and couldn't see any reference made to the bank moving me to a different rate if I rented out the property, or any reference that it must remain my PPR.

I wrote to the bank and got a letter back 3 weeks later stating that I would lose my tracker if I rented out my property and that it would become a residential investment property
 

Mrs Vimes

Frequent Poster
Messages
954
Hi jigsaw,

I would write back to the bank and ask them to point to the clause in your mortgage contract stating that they have the right to take your tracker if the house is no longer your PPR.

I think that unless the contract states that it has to remain your PPR for the duration of the mortgage they would be on shaky ground trying to enforce this.
 

Knuttell

Frequent Poster
Messages
704
Hi jigsaw,

I would write back to the bank and ask them to point to the clause in your mortgage contract stating that they have the right to take your tracker if the house is no longer your PPR.

I think that unless the contract states that it has to remain your PPR for the duration of the mortgage they would be on shaky ground trying to enforce this.
Also add that you are looking for a final response letter from them on this issue,you will require this in order to progress your case to the Financial Ombudsman's office,if its not in your contract then I cannot see how they intend rolling you off a Tracker.

They will know exactly where this is going when you ask for a final response letter and can be assured that it will be escalated upwards within the Bank and you will not be issued with a standard template reply.
 

twofor1

Frequent Poster
Messages
1,347
I checked my mortgage contract and couldn't see any reference made to the bank moving me to a different rate if I rented out the property, or any reference that it must remain my PPR.
I don’t think just because your loan agreement doesn’t specifically say you will lose your tracker if you rent, means you can rent without losing it, there is a lot of small print in there.

One of the conditions in most mortgage agreements is you cannot Convey, Transfer or Let the property without the banks written permission.

There is also usually a clause stating the loan will become immediately due and payable on demand if any of the conditions are not met.

Your bank is only willing to give you permission to rent at their investment rate, because if you rent the house, it would then be an investment property. If this came before the Ombudsman, I think the bank would have a good case.

If you have to rent regardless, you know your bank will apply the investment rate if notified, I would be inclined to just do it and say nothing.

Your insurers are probably obliged to notify the bank of the change in cover, cancelling TRS and change of your correspondence addressee will be other definite flags.

But if payments are being made maybe it will be nobody’s job to notice.

If they do notice and apply the investment rate, you can start the complaints procedure then, though I would not be over confident, but you would have nothing to lose.

Good luck with whatever you decide.
 

ryaner

Frequent Poster
Messages
317
One of the conditions in most mortgage agreements is you cannot Convey, Transfer or Let the property without the banks written permission.
There are quite a few mortgages from the boom years without anything similar to this. Some of the banks "simplified" the mortgage documents resulting it very lax terms.
 

twofor1

Frequent Poster
Messages
1,347
There are quite a few mortgages from the boom years without anything similar to this. Some of the banks "simplified" the mortgage documents resulting it very lax terms.
Maybe so, I don’t know. If the agreement doesn’t specifically say you will lose your tracker by renting, and doesn’t have a clause requiring permission to let, then your case would certainly be stronger but still doesn’t mean you can definitely rent without losing your tracker, the bank can still reasonably argue they have always charged more for investments, they gave you a home loan and this is now an investment property.

One angle that might be worth looking at is if your bank gave investment trackers when you took your home tracker, you might be able to argue that it should now revert to the then investment tracker margin which would probably be higher than your current margin, but a lot better than the variable investment rate, just a thought.

If you rent you only have two choices, tell the bank or don’t tell the bank.

In jigsaws case, he has to rent and his bank have confirmed in writing he will lose his tracker and go on the variable investment rate.

In this case I can’t see what there is to lose by taking the ‘’don’t tell the bank option’’, see what happens and take it from there.
 

Delboy

Frequent Poster
Messages
1,593
There are 2 ways that the banks could catch you if they have the will to, from my reading of the situation:
1. if your still on TRS, you rent your house and the Revenue inform the bank that TRS should be stopped
2. if, as someone stated above, they check the PRTB register

I spoke to my bank some months ago about getting a 2nd mortgage to get a bigger house. I said I did'nt want to sell my current house as it is in NE, and in any case, it's in a good area to rent.
But that by taking out a 2nd mortgage, this would alert them to me moving house and I'd lose my tracker on the original home.
The girl I spoke with told me that they don't check this out and she is the proof of that as she has 2 mortgages with them, and still has the tracker on her 1st purchase. I suggested they may check it out some today and we'd al get whacked with arrears for interest. She said she did'nt see this happening.

But I left it at that and ave'nt progressed things further since
 
Top