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Bank demanding that I change mortgage

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  • 13-07-2020 7:37pm
    #1
    eam77
    Registered Users Posts: 70 ✭✭


    I have a property that I have a mortgage on and we recently decided to rent it out. Our mortgage lender is saying we have to change from residential mortgage to a buy to let mortgage.
    Is it technically applying for a new mortgage?
    Are we going to be better off or worse off by changing?
    Or if we ignore them and carry on repaying the residential mortgage, will they chase us to change anyway?
    Any help will be appreciated. Thanks


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    #2
    awec
    Administrators Posts: 53,800 Admin ✭✭✭✭✭awec


    The bank knows you're letting it out so you won't get away with not changing, I am pretty sure you'd be considered in breach of your original mortgage contract at this stage.

    You'll be worse off as interest rates on BTL are a lot higher, around the 5% mark.


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    #3
    JustAThought
    Registered Users Posts: 5,324 ✭✭✭JustAThought


    How did your bank know you are letting it out?

    Of course if you decide not to let it out, will they continue to demand that you change mortgage product?

    Best advice I got before I was lucky enoug to be able to take out a mortgage was never to have my active ‘money’ account with the same bank as my mortgage as it would allow them to see everything that was going on financially in my life. It was extremely good advice, whomever told me did me a huge favour.


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    #4
    awec
    Administrators Posts: 53,800 Admin ✭✭✭✭✭awec


    JustAThought wrote: »
    How did your bank know you are letting it out?

    Of course if you decide not to let it out, will they continue to demand that you change mortgage product?

    Best advice I got before I was lucky enoug to be able to take out a mortgage was never to have my active ‘money’ account with the same bank as my mortgage as it would allow them to see everything that was going on financially in my life. It was extremely good advice, whomever told me did me a huge favour.

    It was fairly nonsense advice, it's one of those old wives tales things.

    Your bank can't just open your accounts and browse through your transactions as it pleases.


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    #5
    JPA
    Registered Users Posts: 13,771 ✭✭✭✭JPA


    awec wrote: »
    It was fairly nonsense advice, it's one of those old wives tales things.

    Your bank can't just open your accounts and browse through your transactions as it pleases.

    They can request 6 months bank statements though.


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    #6
    XsApollo
    Registered Users Posts: 2,455 ✭✭✭XsApollo


    I presume the insurances are void also if you are letting instead of living in it?


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    #7
    awec
    Administrators Posts: 53,800 Admin ✭✭✭✭✭awec


    JPA wrote: »
    They can request 6 months bank statements though.

    When applying for a mortgage? Of course? They have to request it though, and even your own bank will need your permission to look at your accounts that you hold with them.


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    #8
    Synode
    Closed Accounts Posts: 7,967 ✭✭✭Synode


    How did the bank find out you're letting it


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    #9
    Witcher
    Registered Users Posts: 14,934 ✭✭✭✭Witcher


    awec wrote: »
    When applying for a mortgage? Of course? They have to request it though, and even your own bank will need your permission to look at your accounts that you hold with them.

    That's completely incorrect.


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    #10
    awec
    Administrators Posts: 53,800 Admin ✭✭✭✭✭awec


    Witcher wrote: »
    That's completely incorrect.

    What part?

    You think Joe Bloggs in the bank can open up Witcher's accounts whenever he wants and see what you're spending your money on?


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    #11
    eam77
    Registered Users Posts: 70 ✭✭eam77


    Synode wrote: »
    How did the bank find out you're letting it

    Let it slip when asking for a payment break...


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    #12
    Synode
    Closed Accounts Posts: 7,967 ✭✭✭Synode


    Yeah you're goosed then


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    #13
    Witcher
    Registered Users Posts: 14,934 ✭✭✭✭Witcher


    awec wrote: »
    What part?

    You think Joe Bloggs in the bank can open up Witcher's accounts whenever he wants and see what you're spending your money on?

    Yes and I know this because I worked in banking.

    There is no mechanism to 'request permission' to access an account, all I can say to that fanciful notion is LoL.


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    #14
    awec
    Administrators Posts: 53,800 Admin ✭✭✭✭✭awec


    Witcher wrote: »
    Yes and I know this because I worked in banking.

    There is no mechanism to 'request permission' to access an account, all I can say to that is LoL

    So you just opened whatever account you wanted, whenever you wanted?


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    #15
    Witcher
    Registered Users Posts: 14,934 ✭✭✭✭Witcher


    awec wrote: »
    So you just opened whatever account you wanted, whenever you wanted?

    You could if you wanted to.


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    #16
    awec
    Administrators Posts: 53,800 Admin ✭✭✭✭✭awec


    Witcher wrote: »
    You could if you wanted to.

    Without repercussion or consequence? All above board and legit to do so?


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    #17
    Witcher
    Registered Users Posts: 14,934 ✭✭✭✭Witcher


    awec wrote: »
    Without repercussion or consequence? All above board and legit to do so?

    Why would there be consequences? It's part of the business function

    You'd be looking up hundreds of accounts a day...that's part of what banks do..there's no pie in the sky 'permission' systems, nobody who works in a bank gives two sh1ts about searching up accounts but it could be done.


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    #18
    awec
    Administrators Posts: 53,800 Admin ✭✭✭✭✭awec


    Witcher wrote: »
    Why would there be consequences? It's part of the business function

    You'd be looking up hundreds of accounts a day...that's part of what banks do..there's no pie in the sky 'permission' systems, nobody who works in a bank gives two sh1ts about searching up accounts but it could be done.

    Randomly? Surely you are looking up the accounts of people who apply for mortgages, loans or credit, perhaps have made unusually large cash deposits, or have some other reasonable reason for needing to access their account?

    I mean, you are suggesting here that you could randomly look up the account of anyone you wanted, at any time, look at their income, look at what they spend their money on, for no reason whatsoever other than idle curiosity, and you could do this openly and without any consequence?


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    #19
    Witcher
    Registered Users Posts: 14,934 ✭✭✭✭Witcher


    awec wrote: »
    Randomly? Surely you are looking up the accounts of people who apply for mortgages, or have some other legitimate reason where looking through accounts is part of the process?

    I mean, you are suggesting here that you could randomly look up the account of anyone you wanted, at any time, look at their income, look at what they spend their money on, for no reason whatsoever other than idle curiosity, and you could do this openly and without any consequence?

    Yes, you could.


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    #20
    awec
    Administrators Posts: 53,800 Admin ✭✭✭✭✭awec


    Witcher wrote: »
    Yes, you could.

    That is interesting. Do banks employ many people to randomly go through accounts for no reason whatsoever?


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    #21
    guyfawkes5
    Registered Users Posts: 291 ✭✭guyfawkes5


    Regarding OP:

    You agreed to have the property as your primary residence in your mortgage contract so the bank are well within their rights to move you onto a BTL rate.

    Depending on the size of your mortgage, this could end up costing you 100s of Euros every month.

    If I were you, I would immediately contact the bank to see if there's some way you could stay on your current rate such as cancelling your rental plans and moving back in.


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    #22
    Alrigghtythen
    Closed Accounts Posts: 1,365 ✭✭✭Alrigghtythen


    XsApollo wrote: »
    I presume the insurances are void also if you are letting instead of living in it?

    Yes it will be


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    #23
    BoyLaw937
    Registered Users Posts: 26 ✭BoyLaw937


    awec wrote: »
    What part?

    You think Joe Bloggs in the bank can open up Witcher's accounts whenever he wants and see what you're spending your money on?

    They can.

    Source: I did


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    #24
    LawBoy2018
    Registered Users Posts: 1,162 ✭✭✭LawBoy2018


    .


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    #25
    awec
    Administrators Posts: 53,800 Admin ✭✭✭✭✭awec


    BoyLaw937 wrote: »
    They can.

    Source: I did

    Fair enough, I stand corrected.

    It seems mad in this privacy crazy world that random bank employees are allowed/encouraged to browse random accounts without reason or cause.


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    #26
    guyfawkes5
    Registered Users Posts: 291 ✭✭guyfawkes5


    awec wrote: »
    That is interesting. Do banks employ many people to randomly go through accounts for no reason whatsoever?
    From having worked at a fintech R&D department, security like this is accomplished by automation - from arbitrary transfer rules like transactions above a certain amount or transfers from networks with a history of fraud, to AI-driven stuff in the more cutting edge startups.

    Having people spot check accounts, even at random, wouldn't be scalable and I suspect not strictly legal.

    *Edit: seems the conversation is more about checking accounts in a targeted fashion and not at scale. The above is the larger scale security.


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    #27
    TuringBot47
    Registered Users Posts: 991 ✭✭✭TuringBot47


    eam77 wrote: »
    I have a property that I have a mortgage on and we recently decided to rent it out. Our mortgage lender is saying we have to change from residential mortgage to a buy to let mortgage.


    Are we going to be better off or worse off by changing?


    Worse off, different rates.


    Also, if you still get mortgage interest relief at source then that will be immediately stopped.

    Landlords claim interest relief to offset their tax bill, when they legally declare the rental income.


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    #28
    awec
    Administrators Posts: 53,800 Admin ✭✭✭✭✭awec


    guyfawkes5 wrote: »
    From having worked at a fintech R&D department, security like this is accomplished by automation - from arbitrary transfer rules like transactions above a certain amount or transfers from networks with a history of fraud, to AI-driven stuff in the more cutting edge startups.

    Having people spot check accounts, even at random, wouldn't be scalable and I suspect not strictly legal.

    *Edit: seems the conversation is more about checking accounts in a targeted fashion and not at scale. The above is the larger scale security.

    This is what I suspected too, but it appears from this thread that bank employees can look through your account at any time for no reason at all and that there are no policies or procedures against this.

    I was aware of the automated flags that can happen for certain transactions, but not this.

    Truth be told, I am still somewhat skeptical.


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    #29
    tvjunki
    Registered Users Posts: 602 ✭✭✭tvjunki


    I think I while back the Banks looked at their mortgage book to see what was BTL to see what they could sell off. They also checked what was home mortgage that changed to btl. They just had to go to rtb to find out what properties were registered to be rented out. They could also do a register search and see if you had another property you had a mortgage on.

    Check your mortgage contract. Some got a mortgage that were not restricted to home owners only. If you have a lovely tracker they can in some cases request you move to higher btl mortgage.

    You can move back in and let them know if is your principal private residence. If you rang them to say you are moving out then all you can do is reverse your decision and the house you have bought rent that out. Work out what is better financially for you.


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    #30
    LawBoy2018
    Registered Users Posts: 1,162 ✭✭✭LawBoy2018


    awec wrote: »
    This is what I suspected too, but it appears from this thread that bank employees can look through your account for no reason at all and that there are no policies against this.

    Why would it be illegal?


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    #31
    Renjit
    Registered Users Posts: 949 ✭✭✭Renjit


    awec wrote: »
    This is what I suspected too, but it appears from this thread that bank employees can look through your account at any time for no reason at all and that there are no policies or procedures against this.

    Those with access and authorizations can look at the data. Of course, it may be logged and audited later.


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