Changing family home to a rental/investment

I

Iomar

Guest
Hi,
My husband, son & myself have recently moved location
in order to be closer to family and for health reasons(depression).

We are currently renting a property for €700 a month
We have managed to rent our previous family home out for €580 in July
We are currently on interest only with aib €510 a month and have not missed a payment.
The 12 month interest only runs out this month.
We have not informed the bank or revenue as yet that we are renting
out the property.

Should we arrange a meeting with the bank and inform them that we are renting the property and would like to extend the interest only option for
another 12 months. Notify revenue to stop the TRS.

Has anyone gone through similar lately. Will we be charged a higher rate of interest? Original mortgage contract does not state any condition about renting the property. Are the banks open to interest only on what is now an investment property?
We had 2 incomes at time of mortgage approval, which we are now down to 1 income. Not sure if that will make any difference with the bank

Hope the post is some way coherent. Any advice welcome...
 
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Brendan
Administrator
 
Iomar - I'm in exact same situation - I know not all banks will move to an investment rate just because the house is now rented.

My own experience of this is that I released 50k from my then home in 2006 to fund a new house purchase. I then rented out the first house. The bank put me on a variable investment rate for the 50K but left the original 100k mortage on tracker.

My IO period is up in a few months - but I'm nearly afraid to talk to the bank about an extension in case they realise the original 100k should also be at investment rate!!

For information it's BOI and the original mortgage was drawn down in 2001.
 
Have you registered with the PRTB?
Have you paid the NPPR?
You should have notified Revenue to stop claiming the TRS.
Have you informed your insurance company?

You should have notified the Bank - however that is something that may have significant implications for your mortgage rate (it's now an investment property) let alone whether an extension for Interest only will be granted.
 
TRipley - we are the same. Afraid to arange a meeting with the bank to discuss. We need to talk to someone but not sure what to expect.
Would ideally get IO for another 12 months, and put the house on
the market in Jan and hopefully get enough to clear the mortgage.

Registered with the PRTB
NPPR is N/A for this year
Landlord Insurance taken out.
 
I'm pretty sure that in practice banks won't move you off your current rate - I'm basing this on my own experience where my tracker wasn't changed and 3 different people I've spoken to today with investment properties.

Unless I guess if there is something specific in your T&Cs but as you say in yours there isn't...let me know how you get on though and good luck!!
 
I'm in a similar situation - need more space so need to move out of current house and rent somewhere bigger but am scared of losing my tracker rate. Response from bank was that if I do rent it out they'll switch it to an "investment rate".

Talk about rock and hard place. Any more experiences/thoughts/opinions?
 
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