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Retain tracker on rented house

  • 08-03-2016 9:16pm
    #1
    FrasierCrane
    Registered Users Posts: 184 ✭✭


    We have a tracker mortgage on our current home. We are looking at the possibility of buying a second home with a mortgage from another lender and renting out our current house.

    Will it be possible to retain our tracker rate on our existing mortgage even though we will be renting it and living in our new home?


Comments

  • #2
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    Yes that should not be a problem however just check the terms and conditions of your loan offer. In my experience it's done all the time and lenders are just happy to get paid.


  • #3
    FrasierCrane
    Registered Users Posts: 184 ✭✭FrasierCrane


    Trish56 wrote: »
    Yes that should not be a problem however just check the terms and conditions of your loan offer. In my experience it's done all the time and lenders are just happy to get paid.

    Thanks.

    I'm thinking if I don't make an issue of it my lender will be happy enough to see the repayments kept up and it won't become a problem.

    Reading my contract, it doesn't say anything either way about it becoming a buy to let property. The less said the better I think.


  • #4
    duchalla
    Registered Users, Registered Users 2 Posts: 329 ✭✭duchalla


    Whatever about not letting your lender know, make sure you let Revenue know. You'll need to cancel your TRS. You'll have to pay tax on the rental income as well as USC and PRSI. Get an accountant to do your returns for the first year.


  • #5
    FrasierCrane
    Registered Users Posts: 184 ✭✭FrasierCrane


    duchalla wrote: »
    Whatever about not letting your lender know, make sure you let Revenue know. You'll need to cancel your TRS. You'll have to pay tax on the rental income as well as USC and PRSI. Get an accountant to do your returns for the first year.

    Thanks

    I'd wouldn't have a problem taking the hit on the TRS or paying tax on the income. That's all fair enough.

    By contacting revenue to to cancel my TRS, would this trigger my lender to review my mortgage account I wonder? TRS is due to finish in 2017 anyway.


  • #6
    duchalla
    Registered Users, Registered Users 2 Posts: 329 ✭✭duchalla


    I wouldnt be 100% sure but it shouldnt, the full amount of the mortgage is still coming out of your account to your lender, Revenue are reimbursing you the TRS after the payment is made.


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  • #7
    uberwolf
    Registered Users, Registered Users 2 Posts: 7,580 ✭✭✭uberwolf


    duchalla wrote: »
    I wouldnt be 100% sure but it shouldnt, the full amount of the mortgage is still coming out of your account to your lender, Revenue are reimbursing you the TRS after the payment is made.

    the bank administrate this though, and in theory ought to have the means to identify this. Most homeloans have terms and conditions to capture this situation and the loan would no longer be covered by the CCMA. Nonetheless practise would suggest that the OP will have no difficulties and I'm relying on the exact same...


  • #8
    g0g
    Registered Users, Registered Users 2 Posts: 2,791 ✭✭✭g0g


    I did this a few years ago (have since sold the second property). As another poster mentioned, I think banks aren't likely to focus on you assuming payments are coming in on time. That said, definitely some trackers specifically say in the T's & C's that it's based on being your primary residence etc, and that they can go back to their standard rate (possibly investment rate?) if you're not living there.


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