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Letting with an owner/occupier mortgage

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  • 08-12-2013 9:11pm
    #1
    pandres
    Registered Users Posts: 4 ✭


    What would be the likely repercussions if an owner/occupier was found to have rented out their property without a buy-to-let mortgage?

    Is it illegal or what? Would there be penalties? Increase in interest rate? ...


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    #2
    coylemj
    Registered Users Posts: 25,437 ✭✭✭✭coylemj


    You would be in breach of the mortgage agreement but it wouldn't be 'illegal' at least not in the criminal sense as the Gardai for example wouldn't get involved. Just make sure that you have landlord insurance on the premises, let the tenants insure their own possessions and you'll be fine.


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    #3
    pandres
    Registered Users Posts: 4 ✭pandres


    Thanks.

    Continuing to speak hypothetically ...

    It would be good news to hear that this wouldn't be a criminal situation, but what would the likely upshot of breach of agreement be?

    Suppose everything else was in order (e.g. all payments had been made and the insurance was correct), and that the bank official was aware of the plan to let when granting the o/o mortgage, what would the bank demand (if anything) if someone at the bank, after a number of years, were to come across the situation and decide that it needed to be rectified?

    I imagine they might insist on changing to a b-t-l mortgage with a higher rate, but would they demand that that rate be back dated, or that other penalties might be applied?

    Hypothetically.


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    #4
    pandres
    Registered Users Posts: 4 ✭pandres


    *Bump*


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    #5
    3DataModem
    Registered Users Posts: 3,997 ✭✭✭3DataModem


    I'll tell you my experience in this regard, having done what you describe (moved out of owner occupied home and then let it out) three times. I also worked in one of the major banks a while back.

    The bank won't care, as long as you continue to make the payments.
    Just write to the bank and change your correspondence address, contact the revenue to cancel the mortgage interest relief, and change your house insurance to 'landlords insurance'.

    > They won't move you on to a BTL rate
    > They won't remove your tracker.
    > They won't give a hoot

    You will hear many people say that you'll lose your rate, or your tracker, etc.

    I have never - ever - heard of someone having this happen; except in the case where the person purchased a second property to live in AND mortgaged it with the same bank. The bank told them only one of them could have the "owner occupier" rate.


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    #6
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    can we stop with the hypothetically nonsense. Give me a break no bank is going to come on here and try and hunt you down you don't have to pretend you have a question. Sheesh


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    #7
    Fol20
    Registered Users Posts: 3,624 ✭✭✭Fol20


    Are you able to claim the interest at 75pc, or do you not do that because you have not notified the bank?


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    #8
    3DataModem
    Registered Users Posts: 3,997 ✭✭✭3DataModem


    Fol20 wrote: »
    Are you able to claim the interest at 75pc, or do you not do that because you have not notified the bank?

    Yes you can claim it.


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