An interesting letter to Dominic Coyle in Monday's Irish Times.
I post it here, as I may be in a similar situation soon.
I was wondering if anyone had any experience of this? Have any of you had to "lose" your tracker mortgage in order to rent the house out?
Another related question, how does the above scenario affect FTB status and mortgage interest relief? I bought my house as an FTB, however I fear that I would be liable to "clawback" taxation if I was to rent it out if I broke the owner-occupier terms. This may also impact on mortgage interest relief.
Two points to note:
When I come to this situation, I will seek professional advice, but was interested in the public experiences.
I intend to do this legally, rather than chance my arm.
I post it here, as I may be in a similar situation soon.
PERSONAL FINANCE: Your queries answered
Q
My daughter has a tracker mortgage with Permanent TSB. Her boyfriend also has a property with his own mortgage which is not a tracker. They want to move in together and rent my daughter’s apartment. The rent should cover most of her mortgage, and she will pay “rent” to her boyfriend to help with his mortgage.
If they proceed on these lines will she be breaking the terms and conditions of the tracker mortgage and then be exposed to a negotiation of a new mortgage and lose the tracker benefit?
- Mr D McM, e-mail
A
As you correctly perceive, a tracker mortgage is a contract – in this case between your daughter and the lender. She should certainly check with Permanent TSB before making any decision. It may be that the mortgage contract requires her to be an “owner-occupier” in order to avail of the terms of her tracker rate. Renting out her apartment could prove more costly than she thinks if it costs her the tracker.
Q
My daughter has a tracker mortgage with Permanent TSB. Her boyfriend also has a property with his own mortgage which is not a tracker. They want to move in together and rent my daughter’s apartment. The rent should cover most of her mortgage, and she will pay “rent” to her boyfriend to help with his mortgage.
If they proceed on these lines will she be breaking the terms and conditions of the tracker mortgage and then be exposed to a negotiation of a new mortgage and lose the tracker benefit?
- Mr D McM, e-mail
A
As you correctly perceive, a tracker mortgage is a contract – in this case between your daughter and the lender. She should certainly check with Permanent TSB before making any decision. It may be that the mortgage contract requires her to be an “owner-occupier” in order to avail of the terms of her tracker rate. Renting out her apartment could prove more costly than she thinks if it costs her the tracker.
I was wondering if anyone had any experience of this? Have any of you had to "lose" your tracker mortgage in order to rent the house out?
Another related question, how does the above scenario affect FTB status and mortgage interest relief? I bought my house as an FTB, however I fear that I would be liable to "clawback" taxation if I was to rent it out if I broke the owner-occupier terms. This may also impact on mortgage interest relief.
Two points to note:
When I come to this situation, I will seek professional advice, but was interested in the public experiences.
I intend to do this legally, rather than chance my arm.