Be careful if you are struggling with a tracker on a buy to let...

Brendan Burgess

Brendan Burgess

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A tracker mortgage is very valuable.

If you have one on your family home, there are huge protections in place, which effectively stop the banks from taking it from you.

If it's on a buy to let, you do not have the same protections.

Bank of Ireland made restructuring of some buy to let mortgages conditional on surrendering the tracker. Some other banks may have done this as well.

If you are in deep arrears and the property is empty and you can't pay the mortgage, then there isn't much you can do.

But some of the ptsb stories are staggering as the borrower could have avoided the sale to Start:
Why did ptsb sell my Buy to Let loan to Start with only one missed payment?

For some unexplained reason, he had the money but stayed in arrears of €600 for at least 6 months.

If you can clear your arrears on a buy to let, you should do so.

In this strange circumstance, actually prioritizing your buy to let over your home may make sense. Ideally you should stay up to date on both, but your home loan is very well protected while your buy to let is not.

If you got a restructure such as interest only or an extended term which you no longer need, consider going back to the original schedule. Not only will your credit record start to heal, your mortgage is less likely to be sold.

Brendan
 
Hi Brendan, one of my buy to lets is on an ecb tracker rate 1.10%. The other buy to let is 5.8% rate, both went in to arrears, both restructured over 3 years ago with arrears capitalised at that time. All payments made to date, both in negative equity but climbing slowely, buy to let on 1.10% tracker is in much worse trouble equity wise than the buy to let at 5.8%. I also have 2 home mortgage payments per month on PDH, made up of a main mortgage which is on 1.25% tracker and One plan mortgage at 4.5%, never missed any payments on home mortgages.

All have been sold to start.

Around 40% of the rental income from the Buy to let with the 1.10% tracker rate, is being used towards the monthly costs of the buy to let at 5.8% rate.

PDH is in positive equity.

I know there is no way that Start will allow me to keep tracker rate on buy to let after review, I also know they don't offer split mortgages which is the restructure agreement I have with PTSB.

I am thinking of defaulting on the 5.8% buy to let mortgage to make full interest and capital repayments on the tracker mortgage. The tracker buy to let mortgage is around 70-75k in negative equity, the 5.8% buy to let is around 35-40k negative equity.

If I choose this option and ecb rates don't go too mad over the next 3-4 years between full payments and meagre house price increases in this part of the Country the buy to let tracker mortgage could be out of negative equity.

I have no idea what would happen to the 5.8% mortgage I default on but I know both of them as things currently stand are a noose around my neck and if the tracker goes I have no hope of getting out of this without the risk of loosing my Home.

Would this be a sensible decision, and if it is would it be best to default on 5.8% loan and impliment full mortgage payments on the buy to let tracker now, whilst it's still in the hands of PTSB or best to wait for Start mortgage review. My Gut tells me now as I have no idea if the option to make full payments on tracker will even exist with Start when review takes place.
 
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