Change from PPR to investment - mortgage implications

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summer08

Guest
Hi folks,

I purchased a house 2 years agao that I initially used as my PPR. Over a year ago, I moved to rented accommodation for logistical purposes with my work, and rented out my house. At that stage I paid my stamp duty and registered with the PRTB and ceased claiming the interest allowance each month with the mortgage payment.

The fixed term on the mortgage rate is ceasing next month. My query is, given i have changed staus from private home owner to investor, can I still avail of the private home owner mortgage rates and terms? My mortage is currently for 35 years however doing a bit of research on some of the bank websites re current rates, only loans for 25-30 years seem to be available to investors.

Can anyone help me with this query. While the rental income currently covers the mortgage, the massive increase required by getting investor rates and terms will result in huge personal contribution tot he mortgage.

Many thanks
 
Have you read the some of the many existing threads on this issue?
summer08 said:
My query is, given i have changed staus from private home owner to investor, can I still avail of the private home owner mortgage rates and terms?
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Depends on your lender and the terms & conditions of your loan agreement.
While the rental income currently covers the mortgage
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Rental income net of tax?
the massive increase required by getting investor rates and terms will result in huge personal contribution tot he mortgage.
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See the key post in this forum on why an interest only mortgage may make sense for an investment property.
 
Surely if your fixed rate has ended you just go onto the variable rate or you sign a new fixed rate term form. They won't ask you anything about the status of the house. Your problem would only be that you may have to stick with your current lender.
 
Should he not declare this fact? Would the T & C's not put the onus on him to do so?
 
I'm wondering am i legally obliged to inform my mortgage provider that my status of ownership has changed?

I dont want to be in trouble down the line by not telling them now.
I really dont think i can change to a 25-30 year term as the 35 year term suits from the point of view that the rental income more or less covers the mortgage as it currently stands. My rental income is almost the same as the interest levels that are paid on the mortgage.

Any help/guidance much appreciated
 
Not all mortgage contracts oblige you to inform the lender if you change from an owner occupier to a landlord. Check out the small print in your contract. I have a mortgage that was originally an owner occupier and had a fixed rate, the bank branch know it is rented out but when the rate was up Dublin just sent a new form/letter and I completed it, it was a matter of ticking a box and signing it.
 
You should switch to an interest only mortgage with your lender. The tax advantages have been explained elsewhere on AAM.

You will have to change your house insurace policy - it doesn't cost that much extra, but if something happens to the house when it is rented out and you are still paying PPR insurance, the insurance company probably wouldn't pay up.

You will probably have the option to drop life cover on the investment property, but you should check with your lender first.
 
Bronte said:
Not all mortgage contracts oblige you to inform the lender if you change from an owner occupier to a landlord. Check out the small print in your contract. I have a mortgage that was originally an owner occupier and had a fixed rate, the bank branch know it is rented out but when the rate was up Dublin just sent a new form/letter and I completed it, it was a matter of ticking a box and signing it.
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That sounds more a case of the left hand not knowing what the right hand is doing than anything else. Had the boys up in the big smoke known, rather than just the local branch it may have been different.
 
rmelly said:
That sounds more a case of the left hand not knowing what the right hand is doing than anything else. Had the boys up in the big smoke known, rather than just the local branch it may have been different.
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I think you're wrong because when I would have applied for other loans or whatever I would have listed the original property as having a rental income. But because it was in the past the young one's in Dublin don't go looking at that, in my experience they find it hard to cope with just one mortgage at a time. And the branches hate Dublin and vice versa. It may be the case for people who recently bought houses that the terms and conditions specify that you have to notify the bank. Even if it does most people don't read the small print and wouldn't even know they have to notify the bank when they change their home to an investment property.
 
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