Banks to review Tracker Mortgages on Buy to let properties with view to remove?

ronan45

Can the banks actually do that. Just listening to Newstalk. It appears trackers mortgages were only for owner occupiers (small Print)? The banks are up to every trick in the book it seems. They are to review their books this year. Is this legal

Pablo Sanchez

Its legal if that what it states on your mortgage contract, have a look at it to see what it says.

Nwm2

ronan45 wrote: »

Can the banks actually do that. Just listening to Newstalk. It appears trackers mortgages were only for owner occupiers (small Print)? The banks are up to every trick in the book it seems. They are to review their books this year. Is this legal

There were separate investment trackers with higher rates, from some banks at least. I'd say if people lied when filling out their applications then they don't have much come back.

chris85

If people applied as an owner occupier and were intending on using it as an investment property then it serves from right. They shouldnt be able to get the benefits of an owner occupier tracker rate.

Also those who done this (as is faked as an owner occupier when it was investment) this would generally be a 2nd home and if so definitely they shouldnt be getting away with it.

Its not really small print as in a big deal. Owner occupiers have different rates, tax relief (TRS), and other differences. The buyers solicitor should have went through all this with the buyer.

OP, did you apply as an owner occupier with the intention of using the property as a buy to let?

Jim2007

ronan45 wrote: »

Can the banks actually do that. Just listening to Newstalk. It appears trackers mortgages were only for owner occupiers (small Print)? The banks are up to every trick in the book it seems. They are to review their books this year. Is this legal

Yes of course it is legal, just as it is illegal for someone who has obtained such a loan to subsequently rent out the property without informing the bank.

Furthermore, the bank may, under new money laundering laws introduced last year, feel that they are obliged to report the matter to the Revenue. In that case if they taxpayer has claimed tax relief on the amounts as his PPR, then he may find himself the subject of a criminal prosecution...

cookie1977

I have a tracker mortgage on an investment property. The tracker was 1.5% above the ECB as it was specifically for an investment property. They cannot take that type of tracker away from me but the banks are looking at taking trackers off people who rented out their own property on a non investment tracker mortgage.

They may have a chance with getting them removed but I'm sure there will be political pressure on the banks not to do so as there was with the ECB rate cuts for standard variable mortgages, but how much affect this pressure will have???...mixed I'm sure.

unclebill98

Recently dealt with someone who bought as a house to live and then built and rented the original.

I've reviewed their offer letter and nothing about it as they had asked the same thing op.

Will be an expensive venture to legally tackle people on it. In this case they advised the bank their intention and they where given a 1st time buyers tracker mortgage. The application for the mortgage was done over the phone for the majority with contracts and offers letters done it solicitors. Defo going to see how this pans out!

ronan45

chris85 wrote: »

If people applied as an owner occupier and were intending on using it as an investment property then it serves from right. They shouldnt be able to get the benefits of an owner occupier tracker rate.

Also those who done this (as is faked as an owner occupier when it was investment) this would generally be a 2nd home and if so definitely they shouldnt be getting away with it.

Its not really small print as in a big deal. Owner occupiers have different rates, tax relief (TRS), and other differences. The buyers solicitor should have went through all this with the buyer.

OP, did you apply as an owner occupier with the intention of using the property as a buy to let?

No I dont have any investment Properties thank god. Just wondering in general.

chris85

ronan45 wrote: »

No I dont have any investment Properties thank god. Just wondering in general.

Fair enough. its a tricky situation but the buyer is the wrong in these instances and the banks are within their rights to remove a rate that they had reserved for owner occupiers.

There are different rates of risk and so forth and the rates are adjusted due to this for different mortgage products. For instance buy to let rates are usually higher as they are generally second homes for investment and thus if the person comes on bad times they are more likely to default on an investment mortgage and their mortgage for the family home.

Laois_Man

Spotted this on the news last night and I am worried.

I am on a 0.9% tracker. The house I bought in 2006 was genuinely a home I intended to live in, but in 2008, I was made redundant and the only job I could find was 85 miles away. Not wanting a 170 mile round commute to and from work every day, I decided to up-sticks and I am renting a house 10 minutes away from work with my own house now rented out.

I was in no way being decietful when I took out the tracker mortgage - it's just the way things worked out. It is still not an "investment" property because the rent I am getting is barely covering the rent I am paying plus the monthly mortgage payments are over €400 more. If the bank tried to do this, the only course of action I could take would be to move back to my own property as the potential €400 to €500 per month on top of my mortgage would kill me. I would have to try again to find another job closer to there - but I already know with 75% confidence that moving will very likely result in me taking a pay cut....and keeping the same one would result in petrol costs not much different to the additional €400 to €500 per month on top of the mortgage.

I haven't had a chance to yet, but I intend to dig out the mortgage contract and have a read of it. I suspect I still won't fully understand what it says though.

It just seems to me that the bank would be shooting themselves in the foot in my case if they pursued me on this matter because the additional outgoings and/or lesser incommings I would incur no matter what I do would do nothing but very possibly lead me to default making them the biggest losers!

Anyone any comments/advice?

Scruff

Jim2007 wrote: »

Furthermore, the bank may, under new money laundering laws introduced last year, feel that they are obliged to report the matter to the Revenue. In that case if they taxpayer has claimed tax relief on the amounts as his PPR, then he may find himself the subject of a criminal prosecution...

eh? criminally prosecuted for money laundering? can you provide a link to this or are ye just scare mongering?
I would have thought that a refund would have to be made by the person claiming it and a fine imposed.

Jim2007

Scruff wrote: »

eh? criminally prosecuted for money laundering? can you provide a link to this or are ye just scare mongering?
I would have thought that a refund would have to be made by the person claiming it and a fine imposed.

No, that is not what I said... The tax payer could be prosecuted for knowingly submitting a false tax return, in other words the claiming of interest relieve on a property other than his PPR. The event that would cause this to come to light would be an employee of the bank reporting the matter to the authorities.

This was discussed else where on this forum, in a summary an EU directive came into force, which make bank employees responsible for reporting incidents of fraud. It is important to note that individual employees are responsible, not the bank and that it extends to the staff of banks outside the EU, to the extent that they process transactions originating or going to one of the EU countries.

If I recall the details of the forum discussion correctly it was similar to this one, the bank found some issues with a mortgage which cause the bank employee to conclude that a fraud was being committed and that it was their duty to report it. The conclusion was that yes under the law the bank employee was required/entitled to report the issue.

Doom

Laois_Man wrote: »

Spotted this on the news last night and I am worried.

I am on a 0.9% tracker. The house I bought in 2006 was genuinely a home I intended to live in, but in 2008, I was made redundant and the only job I could find was 85 miles away. Not wanting a 170 mile round commute to and from work every day, I decided to up-sticks and I am renting a house 10 minutes away from work with my own house now rented out.

I was in no way being decietful when I took out the tracker mortgage - it's just the way things worked out. It is still not an "investment" property because the rent I am getting is barely covering the rent I am paying plus the monthly mortgage payments are over €400 more. If the bank tried to do this, the only course of action I could take would be to move back to my own property as the potential €400 to €500 per month on top of my mortgage would kill me. I would have to try again to find another job closer to there - but I already know with 75% confidence that moving will very likely result in me taking a pay cut....and keeping the same one would result in petrol costs not much different to the additional €400 to €500 per month on top of the mortgage.

I haven't had a chance to yet, but I intend to dig out the mortgage contract and have a read of it. I suspect I still won't fully understand what it says though.

It just seems to me that the bank would be shooting themselves in the foot in my case if they pursued me on this matter because the additional outgoings and/or lesser incommings I would incur no matter what I do would do nothing but very possibly lead me to default making them the biggest losers!

Anyone any comments/advice?

I'm in the exact same circumstances, but I keep all my banking post going through the old house, so if i'm asked i'm renting out a room or two...