Bank demanding that I change mortgage

LawBoy2018

Renjit wrote: »

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

It wouldn't be widely available to all employees, it would depend on which department they work in.

awec

Renjit wrote: »

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

If the audit showed that Joe Bloggs, who does the mortgage approval stuff at the bank spent his lunchtime looking through his neighbours and mates bank accounts to see what they were spending their money on, would Joe Bloggs be asked to explain himself?

LawBoy2018

awec wrote: »

Why would it be audited later? If the audit showed that Joe Bloggs, who does the mortgage approval stuff at the bank spent his lunchtime looking through his neighbours and mates bank accounts to see what they were spending their money on, would Joe Bloggs be asked to explain himself?

It wouldn't tbh unless 'Joe Bloggs' breached GDPR.

awec

LawBoy2018 wrote: »

It wouldn't tbh unless 'Joe Bloggs' breached GDPR.

Honestly, I find this absolutely mind blowing (genuinely, not being a smart ass).

I work in tech, and the hoops I have to jump through to access any customer data is insane, even if I looked up customers names without proper cause I'd be in serious ****. That bank employees have free reign here is amazing.

Even the ones that have access to this data, I would expect they couldn't just do whatever they want. I stand humbly corrected!

antimatterx

awec wrote: »

Honestly, I find this absolutely mind blowing (genuinely, not being a smart ass).

I work in tech, and the hoops I have to jump through to access any customer data is insane, even if I looked up customers names without proper cause I'd be in serious ****. That bank employees have free reign here is amazing.

Even the ones that have access to this data, I would expect they couldn't just do whatever they want. I stand humbly corrected!

Same, I work in tech also and they are privacy mad (rightly so). If this is true, I think is going to be the scandal coming out of the banking sector. It's going to be worse than the tracker mortgage scandal.

LawBoy2018

awec wrote: »

Honestly, I find this absolutely mind blowing (genuinely, not being a smart ass).

I work in tech, and the hoops I have to jump through to access any customer data is insane, even if I looked up customers names without proper cause I'd be in serious ****. That bank employees have free reign here is amazing.

Even the ones that have access to this data, I would expect they couldn't just do whatever they want. I stand humbly corrected!

If ever you find yourself locked out of your bank accont, one of the first few things you'll be asked to do to verify your identity will be to cite your most recent bank transactions.

Similar practices would be standard in most banks I'd imagine, along with law firms, financial services providers, etc.

awec

LawBoy2018 wrote: »

If ever you find yourself locked out of your bank accont, one of the first few things you'll be asked to do to verify your identity will be to cite your most recent bank transactions.

Similar practices would be standard in most banks I'd imagine, along with law firms, financial services providers, etc.

Ah yea, I've done this, but that sort of access is for a specific reason and has cause, which is not the sort of access I was referring to.

I guess to tie it back to the OP somewhat, and to get back on track a bit, I am surprised that it seems banks do randomly browse through accounts whenever they feel like it to try find an account with rental income for example, and then try and tie that account bank to a residential mortgage holder.

LawBoy2018

awec wrote: »

Ah yea, I've done this, but that sort of access is for a specific reason and has cause, which is not the sort of access I was referring to.

I guess to tie it back to the OP somewhat, and to get back on track a bit, I am surprised that it seems banks do randomly browse through accounts whenever they feel like it to try find an account with rental income for example, and then try and tie that account bank to a residential mortgage holder.

That's incorrect, the OP told us that he himself slipped up and informed the bank re his current situation. A bank would never authorise employees to randomly browse through customer's accounts in the hopes of catching them out. What we're saying is that there would be very little preventing an employee from being nosey and browsing through accounts as they pleased. However, this would be quite rare in my experience.

guyfawkes5

Anyway, OP seems to be in a bit of a hole and almost certainly can't ignore this.

Can you get out of the rental arrangement? The extra interest on a BTL mortgage might wipe out whatever profit you're making there anyway.

cruizer101

LTV might be an issue also, if you were first time buyer you only need 10% deposit, for BTl it is higher, at least 20% if not significantly more.
So depending on how much of mortgage is paid off you may not even be able to get a large enough mortgage.

perfectkama

Why you where looking into a mortgage break tenants stopped paying or is it not breaking even?

BoyLaw937

awec wrote: »

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.

Its not encouraged and I am not even sure that would contravene Data Protection laws as the bank is the Data Controller and it would be covered within the privacy statement upon becoming a customer. Bear in mind now that no information is being disclosed to any third parties. Someone with experience in Data Protection could weigh in here.

The Banks also do yearly reviews of an individuals accounts depending on their exposure. There is a seperation of the type of review done depending on the amount of exposure the customer has, I cannot remember what the amount was, I think it could be like 50k, if your below the review is not as detailed but it still contains info about your loans and exposure. If its above it contains a detailed profile of everything you have ever done.

Also, within the detailed reviews the banks have information of exposure held with other banks, I am not sure how this is gotten.

un5byh7sqpd2x0

LawBoy2018 wrote: »

It wouldn't tbh unless 'Joe Bloggs' breached GDPR.

The very fact that Joe Bloggs is looking through his mate's accounts willy nilly is a breach of GDPR, and the Data Protection regime that preceded it.

Here's an example of something similar: https://www.independent.ie/irish-news/audit-finds-celebrity-data-breaches-29281224.html

Graham

Mod Note

OP told the bank he was letting the property. GDPR is not relevant/helpful here.

3DataModem

<SNIP>

GreeBo

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.

When getting a mortgage the bank will ask for statements from all your accounts with any banks, they already have access to the accounts you hold with that bank.

"seeing everything that was going on financially in your life" is exactly what they are trying to do!:rolleyes:

Xterminator

TLDR summary.

OP signs contract.

Op breaks contract terms.

Bank demands he become compliant.

OP is unhappy that bank found out.

Most people comment on banks conduct, not so much OPs conduct.

I thought you could claim back 100% of the interest via Mortgage Interest Relief?

So even if banks increase your monthly payment right now, you just put it against your tax return at the end of the year? It might mess up cashflow for now but it evens out at the end as your tax bills will be lower.

awec

kian163 wrote: »

I thought you could claim back 100% of the interest via Mortgage Interest Relief?

So even if banks increase your monthly payment right now, you just put it against your tax return at the end of the year? It might mess up cashflow for now but it evens out at the end as your tax bills will be lower.

Can't claim back mortgage interest relief on any mortgage taken out after 2012. It stops for all mortgages next year.

Geuze

awec wrote: »

Can't claim back mortgage interest relief on any mortgage taken out after 2012. It stops for all mortgages next year.

Don't confuse TRS tax relief for owner-occupiers with landlords being able to deduct mortgage interest from gross rental income.

Two different tax reliefs, both based on interest paid.

awec

Geuze wrote: »

Don't confuse TRS tax relief for owner-occupiers with landlords being able to deduct mortgage interest from gross rental income.

Two different tax reliefs, both based on interest paid.

Doh, of course!

Cuddlesworth

Xterminator wrote: »

TLDR summary.

OP signs contract.

Op breaks contract terms.

Bank demands he become compliant.

OP is unhappy that bank found out.

Most people comment on banks conduct, not so much OPs conduct.

In fairness to the OP, if he said it on the call and came to the forum he was clearly unaware of the differences between a PPR and a rental property in terms of his interaction with financial institutions.

grogi

awec wrote: »

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.

And what is bank going to do? Are they going to terminate the mortgage of a customer that is paying and not in arrears?

They are trying to extort higher rate, but they won't do anything to harm the money that is already coming in.

eam77 wrote: »

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

That's a different story. If you already are having problems paying, the bank might decide to cut you loose and eventually reposes the property. It is a very long and bumpy road for them and they don't want to go that way.

Claw Hammer

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.

What is the stop the bank is doing just that?

Synode

grogi wrote: »

And what is bank going to do? Are they going to terminate the mortgage of a customer that is paying and not in arrears?

They are trying to extort higher rate, but they won't do anything to harm the money that is already coming in.



That's a different story. If you already are having problems paying, the bank might decide to cut you loose and eventually reposes the property. It is a very long and bumpy road for them and they don't want to go that way.

I'd say it's well within the bank's contract rights to automatically change it to a commercial loan, with commercial rates. If the OP falls behind that's a completely separate issue

Synode

My 2 cents OP: engage with the bank if they come looking to change it but sit tight until they do.

Astro127

<SNIP>

brisan

tvjunki wrote: »

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 prin
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.

In an ideal world all rented properties would be registered,however we do not live in an ideal world

Bandana boy

kian163 wrote: »

I thought you could claim back 100% of the interest via Mortgage Interest Relief?

So even if banks increase your monthly payment right now, you just put it against your tax return at the end of the year? It might mess up cashflow for now but it evens out at the end as your tax bills will be lower.

It will not even out
tax is not at 100% !!

you will not pay tax on the amount that is interest but you only save what you would have paid tax on before .

Bandana boy

I was in a similar boat three years ago , I have a tracker on house 1 and while the bank i have tracker with was cheapest lender when buying house 2 I stayed away as the cost of moving from tracker to BtL rates would have made the rental too unprofitable and i would have sold up instead.
3 years in there has been no blow back yet , when it does i will probably have to sell the asset and bank the equity , as btl rates compared to a tracker are scary