Changing from Buy to let to Normal Mortgage

M

MacGill

Guest
Two years ago my sister and I, while living in London bought a house in Ireland (equal shares), with the view of returning shortly afterwards. We got an investment/buy to let mortgage from AIB with the condition that it would revert back to a normal mortgage once we return and occupy the property.

My sister returned to live in the property (two year ago) and I took a trip to Australia for a year.

Recently I found out that the mortgage was never reverted back to a normal mortgage as agreed. I contacted the bank to change it back, however they will not change it unless both of us occupy the property. I am currently not in a position to occupy the property.

What are my options in this case, as I am currently paying a higher rate of interest with a buy to let mortgage and there is a possibility of the Inland Revenue not allowing my sister to claim back Mortgage tax relief for the past two years as it’s a buy to let mortgage.

I was thinking of putting pressure on AIB to change it now, or I will change to a different mortgage provider.

Any advise on how to approach this situation would be great.
 
MacGill said:
Two years ago my sister and I, while living in London bought a house in Ireland (equal shares), with the view of returning shortly afterwards. We got an investment/buy to let mortgage from AIB with the condition that it would revert back to a normal mortgage once we return and occupy the property.

My sister returned to live in the property (two year ago) and I took a trip to Australia for a year.

Recently I found out that the mortgage was never reverted back to a normal mortgage as agreed. I contacted the bank to change it back, however they will not change it unless both of us occupy the property. I am currently not in a position to occupy the property.

What are my options in this case, as I am currently paying a higher rate of interest with a buy to let mortgage and there is a possibility of the Inland Revenue not allowing my sister to claim back Mortgage tax relief for the past two years as it’s a buy to let mortgage.

I was thinking of putting pressure on AIB to change it now, or I will change to a different mortgage provider.

Any advise on how to approach this situation would be great.
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I'm sure if you went to a mortgage broker they could help. Don't necessarily have to rely on AIB. You could switch lenders. Interest relief on your PPR is given in the form of a rebate through bank/building society TRS (tax relief at source) and investment interest is treated completely differently i.e. treated as an expense offset against rental.
 
If AIB won't play ball move your mortgage. Simple. Ulster Bank, the EBS and IIB are all offering fees free switcher mortgages.

Sarah

www.rea.ie
 
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