# Advice needed on renting out home but I dont want to lose tracker rate ?



## rath1

Hello.

Im having some bother about renting out my home. My job is not looking so good lately and I have some debt that I am strugling with. So I decided im going to move home for a year to 18 months and let the house out in order to pay off these debts.

I rang my bank to see what restrictions there are if I rent the house out and they said they would take me off my tracker mortgage and put me on a higher variable rate mortgage. And they also said I could not go back to my tracker mortgage. It seems a shame to lose my tracker mortgage for the sake of a year.

Any advise is much apprciated or if anyone knows of a way to avoid losing my tracker.

Regards.

Ian


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## diver

*Re: Advise needed on renting out home but I dont want to lose tracker rate ?*

Unfortunately you will lose your tracker, most banks won't even put you on a standard variable rate as it's now deemed to be an investment property. 
I feel you have two options:
1. Visit the bank in person and explain your predicament....you may be able to negotiate a more favourable rate
2. Remain in your property and rent out some rooms under the rent a room scheme.

I would be very reluctant to give up your tracker mortgage, it's exactly what the banks want us to do!

Good luck


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## dubrov

*Re: Advise needed on renting out home but I dont want to lose tracker rate ?*

Check our mortgage terms. If it doesn't say you need to inform them of a change in circumstances you have no obligation to tell them that you ae renting out the house.

As long as you continue to pay the mortgage, the bank won't come knocking anyway.
You'll need to tell the revenue to stop TRS if ou are receiving it though.

If you have equity, it might be worth trying to sell the house and still moving home.


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## rath1

*Re: Advise needed on renting out home but I dont want to lose tracker rate ?*

Thanks for the replies guys. I really dont want to lose the tracker and will try anything to avoid it.

Can anyone tell me how the bank will know the house is rented out if I say nothing to them. Will they know when my mortgage relief is gone ? Or how will they find out ?

Thanks


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## eirefinq

*Re: Advise needed on renting out home but I dont want to lose tracker rate ?*

Your bank only cares if the mortgage is paid at the end of the day. I dont understand why you asked them the question to begin with? If the mortgage is paid every month your bank will be happy - bottom line. The revenue would be interested though if you dont register with the PRTB and pay any tax due on the rental income less expenses, interest etc.


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## ccraig

*Re: Advise needed on renting out home but I dont want to lose tracker rate ?*

you dont need to tell them, dont cause unnecessary hassle for yourself


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## opelcorsa1

*Re: Advise needed on renting out home but I dont want to lose tracker rate ?*

ohmygod I didnt know this.. I have a tracker mortgage too. nightmarrrre


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## opelcorsa1

*Re: Advise needed on renting out home but I dont want to lose tracker rate ?*

you need to change your insurance if you rent it out, when you do that your mortgage company will know?


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## WaterSprite

*Re: Advise needed on renting out home but I dont want to lose tracker rate ?*

If you cancel TRS on the mortgage account, that would also be a flag to the lender.  If the tracker rate is dependent on you living in the property and it's vital to you to hold on to the tracker, I wouldn't chance moving out in the hope that they won't find out.  

Can you rent out a room instead and stay in the house?


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## dereko1969

Have you checked out rents in your area? You'll need to be aware that, like sales, these are only asking prices - people are generally not paying the rents sought.

You will then need to factor in prtb registration, vacant periods, hassle, increased cost of insurance, etc

I'd do like watersprite suggests and see if renting a room might make more sense.


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## murphaph

Just to relay my circumstance. Was on owner occupier tracker, cancelled TRS, moved primary a/c with same bank to another address, got landlord's insurance and registered with PRTB. Still on tracker 2 years later. I'll take my chances and I'm sure there are thousands out there in the same boat. I doubt the banks have, or are willing to deploy the resources to "catch" people who are actually paying the mortgage back as agreed. The banks are most probably glad that somebody is able to repay their mortgage!


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## WaterSprite

murphaph said:


> Just to relay my circumstance. Was on owner occupier tracker, cancelled TRS, moved primary a/c with same bank to another address, got landlord's insurance and registered with PRTB. Still on tracker 2 years later. I'll take my chances and I'm sure there are thousands out there in the same boat. I doubt the banks have, or are willing to deploy the resources to "catch" people who are actually paying the mortgage back as agreed. The banks are most probably glad that somebody is able to repay their mortgage!



That's also my case - have stayed on tracker since the summer, even though the bank is well aware of my moving to another property.  I'm taking this as pure luck and will be happy for as long as it lasts, but am fully expecting the rate to be changed at some stage.

Some banks will be more keen to check up on trackers.  I'm with NIB, who I'd say would be keen to get me off my (0.5%) tracker, but because of their recent staff cuts, as you say, they may not have the resources.

Glad to hear that you've gotten at least two years out of it!


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## murphaph

WaterSprite said:


> That's also my case - have stayed on tracker since the summer, even though the bank is well aware of my moving to another property.  I'm taking this as pure luck and will be happy for as long as it lasts, but am fully expecting the rate to be changed at some stage.
> 
> Some banks will be more keen to check up on trackers.  I'm with NIB, who I'd say would be keen to get me off my (0.5%) tracker, but because of their recent staff cuts, as you say, they may not have the resources.
> 
> Glad to hear that you've gotten at least two years out of it!


I even went so far as to request a certificate of interest paid for year ending 2008 from them and they never batted an eyelid, Ulster Bank fwiw. I don't think they care so long as the money is being repaid. They would presumably only be likely to switch your rate if they did prove that you were no longer living there and if they wanted to recoup lost revenue would have to sue you for it.


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## opelcorsa1

I have secured and tennant and deposit but havnt signed anything or registered with prtb yet as I dont know whether to just give the deposit back and stay put. im worried that it will cost me much more to rent it out properly and then ill lost tracker mortgage on top, i have a .5% too.


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## galleryman

was looking at same issue myself, as I went onto a tracker also after my first year variable finished a few years ago. 

Just looked at my original mortgage T&C and it states 
"Lettings:the borrowers are prohibited from granting any tenancy on the property being acquired. The property shall have vacant possession on acquisition"

does that mean I simply can't rent it out?

in respect of my tracker, that was simply a letter asking to switch, no new contract signed.


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## WaterSprite

galleryman said:


> was looking at same issue myself, as I went onto a tracker also after my first year variable finished a few years ago.
> 
> Just looked at my original mortgage T&C and it states
> "Lettings:the borrowers are prohibited from granting any tenancy on the property being acquired. The property shall have vacant possession on acquisition"
> 
> does that mean I simply can't rent it out?
> 
> in respect of my tracker, that was simply a letter asking to switch, no new contract signed.



I think that clause means that the tenancy can't be granted as part of the acquisition - so if e.g. there was a sitting tenant prior to purchase, it could not be a condition of purchase that the tenant could stay.  The terms relating to renting out are usually referred to where they discuss that the house must remain your PPR, or there may be a reference to "owner occupier" - have a look for that in the mortgage terms & see if it's there.


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## galleryman

that makes more sense.

In the T&C for the mortgage, No there is no mention of PPR or requirement to notify bank if change of use for property. Only reference is that listed above regardings "Lettings".

This was not a mortgage to purchase the property, it was a refinance done 3 yrs after buying the house. The only special requirement seems to be that we clear the old mortgage.   1 yr later we instructed the bank to move us to a tracker when our 1yr fixed rate ended. No new documents were ever sent out to us re moving to the tracker, we only got a revised repayment schedule showing the new monthly repayment.


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## daymoh

I'm in a similar position as the OP. I'm on a tracker and would like to rent out my property in a few months. I've owned the property for 4 years.

I explained my case to my bank (PTSB) and was told that I don't need to inform the bank as it doesn't affect my mortgage. My mortgage won't change from a tracker. I was told that the only people I need to infom are the Revenue.

Is this standard with PTSB? Why do other banks care that you're renting out your house?


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## Kine

I may be in a similar postion in a few months, this thread makes an interesting read.


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## eddiej

Does anyone know which banks are likely to switch mortgages from trackers to variable or standard rates when the house is rented out?


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## ajapale

eddie,

I reckon if you breach the T&C's all of them will force you off the tracker.

aj


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## Creditlimit

I'm in a similiar predicament as many previous posters and based on my current tracker rate I would stand to pay €315,000 more in interest if I was placed on the highest variable interest rate!!!
The banks are loosing a fortune on tracker rates and it seems likely that will enact some legal loophole to wriggle their way out of it whenever possible. It seems like a big risk to take...


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## Oilean Beag

I am on a tracker with PTSB and when I raised this question with them 1.5 years ago I was advised on the phone that I would not loose my tracker by renting out my house HOWEVER two weeks later I got a letter from them stating that if I rented out my house I WOULD loose my tracker rate and asking me to confirm to them that I had not moved out. I quickly confirmed that I did not and still have my tracker. 

I still live in the house but if I didn't I would be pretty anxious that given the recent  media coverage re banks trying to get out of trackers that they will be examining accounts where TRS has been cancelled and pulling trackers from those customers.


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## smurf

Better to seek forgiveness than permission


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## Oilean Beag

touche.......


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## muffin1973

We're thinking of possibly renting out our house too, also on tracker (with UB).  Know will have to register with the PRTB but the bank can't find out about that can they?  Also, why would you cancel TRS if you're just going into rented property? (sorry I understand TRS to be Mortgage interest relief?).

M


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## txirimiri

You have to cancel TRS if you rent out your house as it is no longer your PPR


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## muffin1973

Oh... what happens if you don't cancel it??

M


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## txirimiri

If you don't cancel it, you will be illegally claiming a tax credit that you are not entitled to and Revenue will take a dim view when they find out! TRS is only for your PPR and once you rent it out, Revenue considers it an investment property. Doesn't matter if it is the only house you own and if it is considered a family home under the Family Home Act. Make sure you are up front with Revenue about this if you do decide to rent it out


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## DrMoriarty

eirefinq said:


> I dont understand why you asked them the question to begin with? If the mortgage is paid every month your bank will be happy - bottom line.


 


ccraig said:


> you dont need to tell them, dont cause unnecessary hassle for yourself


 


smurf said:


> Better to seek forgiveness than permission


With all due respect to the posters concerned, I'd urge you to ignore this advice. As Oilean Beag's case demonstrates, banks would be only too delighted to see someone unwittingly breach the terms of their mortgage and relinquish their tracker rate. Your bank has advised you explicitly what will happen if you move out and rent your home, so your options are pretty simple:

(a) keep it as your PPR and rent rooms, or
(b) give up your tracker.

You'd need to sit down and do the maths, but my hunch is that the long-term cost of losing your tracker would very substantially (depending on the size of your mortgage) outweigh the rental gains over 18 months, or even longer.


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## csirl

muffin1973 said:


> We're thinking of possibly renting out our house too, also on tracker (with UB). Know will have to register with the PRTB but the bank can't find out about that can they? Also, why would you cancel TRS if you're just going into rented property? (sorry I understand TRS to be Mortgage interest relief?).
> 
> M


 
Claiming TRS that you are not entitled to is tax fraud. You can be prosecuted for it.


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## mathepac

muffin1973 said:


> ...   Know will have to register with the PRTB but the bank can't find out about that can they?...


Property addresses registered with PRTB are published (eventually) on the PRTB web-site in county-by-county lists.


muffin1973 said:


> ...   Also, why would you  cancel TRS if you're just going into rented property? (sorry I  understand TRS to be Mortgage interest relief?)...


TRS is only available for your PPR. If you have an investment property you can off-set 75% of the mortgage interest paid as an expense when calculating your profit.


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## Mixednuts

txirimiri said:


> If you don't cancel it, you will be illegally claiming a tax credit that you are not entitled to and Revenue will take a dim view when they find out! TRS is only for your PPR and once you rent it out, Revenue considers it an investment property. Doesn't matter if it is the only house you own and if it is considered a family home under the Family Home Act. Make sure you are up front with Revenue about this if you do decide to rent it out



If your TRS has expired then no issue .

Why are some banks telling customers its not a problem to rent out and hold tracker ?


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## son of riker

Can I ask anyone here if they are with Aib? I moved out of my apartment three years ago. All legit with the state. I changed address with Bank-statements go to new home. Apartment is rented. I rang them today anonymously and made a general enquiry-they said Im safe. I cant find my original tracker agreement or letter.


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## jigsaw

has anybody had any experience with ulsterbank and renting their house out?

did they allow you to stay on the tracker?


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## Troy McClure

Did UB not give you a T&C?

Why dont you do like the previous poster and make an anonymous call to their mortgage section and ask them?

Dont forget to let us know how you get on..


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## surfineddie

*another angle*

If you rent out the house does it loose family home status from a future sale vewpoint. We lived in this house for 12 years. Recently rented it out. Im back with parents, partner is in rented accomadation. We are seperated obviously. Prior to this we could have sld the house and kept any profit tax free. How long after we rent it out do we loose this concession or is it immediate?


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## Complainer

surfineddie said:


> How long after we rent it out do we loose this concession or is it immediate?


12 months.

The last 12 months of occupation prior to a sale is always considered to the owner-occupied for tax purposes.


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## nek

WaterSprite said:


> If you cancel TRS on the mortgage account, that would also be a flag to the lender. If the tracker rate is dependent on you living in the property and it's vital to you to hold on to the tracker, I wouldn't chance moving out in the hope that they won't find out.
> 
> Can you rent out a room instead and stay in the house?


 

i think watersprite makes an interesting point, they could just ask you for your insurance details, 
if they do catch you, would you have to pay back arrears?


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## FTBtracker

Hi,
I am an unfortunate new landlord in the same predicament. 
Large negative equity and need to move house due to job/family reasons. 
I can't believe we have been in a recession with a sever housing problem now since 2008 and the Government still hasn’t addressed these issues- (another forum discussion I imagine).
I cant find a definitive answer anywhere to the question “if I rent my FTB house out, will I eventually loose my tracker”?
For me the main question is “if I inform the Revenue to cancel my Mortgage Interest relief do they inform my Mortgage provider automatically?”….. (I am aware some people get the tax relief off their mortgage monthly payment directly from the Mortgage Provider. Alternatively some people  get the relief as a credit in their bank account separately). 
For me I get it as a credit separately into a different bank to my Mortgage Provider Bank. 
This is the most stressful worry for people that need to move for genuine reasons, but are now locked in a negative equity/mortgage/tax trap.  Rob


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## Bronte

FTB, check your terms and conditions first to find out if you would lose your tracker.  

In any case the bank will not know you have rented.  

TRS/mortgage interest relief for homeowners has nothing to do with the bank.  You just inform revenue.  The tax relief you will get for renting is worth more.  

Another poster mentioned the bank checking the PRTB register.  It's hard enough to read it so come on bank staff are not doing this.


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## FTBtracker

Hi,
Thanks for your reply.
On the PRTB register, this is worrying.  Is it a publically accessible register? 
Ie. Can the banks scan it for properties owners they have that are on Trackers?

On the TRS. Am I correct in saying it runs off after 7 year for FTB’s? I am actually in year (6).There is then no TRS after that?

Is there anything in the new Code of Conduct on Mortgage Arrears regarding banks not being able to take people off their trackers if  they have to rent the PPR our due to work/family and cant sell? 
I am not in arrears, but would be surprised it this big issue has not been addressed by the Government to date effectively. 
Or maybe Im not surprised if it has not been addressed…
Thanks Rob


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## csirl

FTBtracker said:


> Hi,
> Thanks for your reply.
> On the PRTB register, this is worrying. Is it a publically accessible register?
> Ie. Can the banks scan it for properties owners they have that are on Trackers?


 
PRTB register is public - you can view the addresses of all rented properties in the State on their website.


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## walletpod

I'm in the same boat as the OP. Moving abroad for a better salary so I can afford to pay back my mortgage. 

We are moving in 6 weeks. In the process of manicuring the property so that it is attractive to prospective tenants. 

Will cancel TRS, register with the PRTB and will pay NPPR when applicable. My main worry is with my (valuable) tracker mortgage. 

We put an anonymous call to our mortgage provider this afternoon to pose the question: will we lose our tracker mortgage if we rent out our property. Our mort. provider said predictably "yes you would". However, we mentioned that we have reviewed the mortgage offer letter (signed), and no where does it mention that we would lose our tracker if the property was not our PPR. Having heard this, the mort. provider still said that we would lose the tracker. 

I'm pretty sure that if it is not explicity mentioned in the mortgage contract, then the mort. provider cannot remove the tracker rate. But now I'm nervous. Should I seek a second opinion, and is there an independant agency that can look over our mort. contract to confirm my understanding (MABS?).


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## FTBtracker

Hi,
I send an alias email to my mortgage provider asking the same question.
They have so far failed to confirm in writing that I would not loose my Tracker if the house were no longer my PPR. Even though I mentioned if I do not take the new job in another county I will go into arrears anyhow. Surely it is better I move, rent it out and pay my mortgage. 
It is a Catch 22 that is very serious and all PPR Tracker holders in this position need a definitive answer to this important question.

I do believe we need another option on this, as most Tracker holders underestimate the risk of losing the tracker and the associate costs if they move. The interest rate difference would be likely a few percentage points On a €500k mortgage this would be around €800 more a month in the interest difference cost ! 
Would make you think twice about rent out the PPR to take a new job and keeping the economy going!!
Alas, I feel that most politicians are not in this position as they are mostly not negative equity-private sector works in their early 30s. This is not a major issue on politicians radars that they can even relate to.

I wrote to MABS and they just referred me to my mortgage provider. 
I am going to email the Regulator directly to ask them this question regarding tracker mortgages if you have to move jobs and location to continue paying the mortgage and keep the country going.
I will revert when I hear.
Rob


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## walletpod

Hi FTBtracker: I spoke to MABs over the phone and explained my situation (in that if we lose the tracker then we will absolutely fall into arrears).  MABs were very helpful and pointed me in the direction of the "Code of Conduct on Mortgage Arrears 1 January 2011" which is widely available.  In it is states the below important points for my case specifically (and from what it looks like above, your case as well) -

*Primary Residence*[FONT=Calibri,Calibri][FONT=Calibri,Calibri]: means a property which is: 
(i) the residential property which the [/FONT][/FONT]*borrower *[FONT=Calibri,Calibri][FONT=Calibri,Calibri]occupies as his/her primary residence in this State, or 
(ii) a residential property in this State which is the only residential property owned by the [/FONT][/FONT]*borrower*[FONT=Calibri,Calibri][FONT=Calibri,Calibri]. [/FONT][/FONT]
[FONT=Calibri,Calibri][FONT=Calibri,Calibri][/FONT][/FONT] 
[FONT=Calibri,Calibri][FONT=Calibri,Calibri]&[/FONT][/FONT]
[FONT=Calibri,Calibri][FONT=Calibri,Calibri][/FONT][/FONT] 
[FONT=Calibri,Calibri][FONT=Calibri,Calibri]*Pre-arrears*[FONT=Calibri,Calibri][FONT=Calibri,Calibri]: A pre-arrears case arises where the [/FONT][/FONT]*borrower *[FONT=Calibri,Calibri][FONT=Calibri,Calibri]contacts the lender to inform them that he/she is in danger of going into financial difficulties and/or is concerned about going into mortgage [/FONT][/FONT]*arrears*[FONT=Calibri,Calibri][FONT=Calibri,Calibri]. 
[/FONT][/FONT][/FONT][/FONT]


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## csirl

Walletpod, to give you some comfort.

I've a close relative with very similar circumstances to yourself.

Her mortgage offer letter/contract is silent on the issue of renting the property. All it says is that it is a residential mortgage i.e. for a residential property (as oppossed to a commerical premises). A residential property is still a residential property as long as someone is living in it - doesnt have to be the owner/mortgage holder. (Its possible you have the same provider - I'm PM you the name).

This bank is fully aware that the property is rented - the person went into their branch to get the postal address on the mortgage account changed as well as her other accounts to her new address. The property was also insured by the insurance wing of this bank and the insurance was changed to a rental property (which also required notification to the mortgage section of bank as they have an interest in the policy). To date, the bank does not seem to have a problem with the property being rented. If they were to raise the issue in the future, my relative would simply point to the mortgage contract and say that it is not a condition of the mortgage.




> We put an anonymous call to our mortgage provider this afternoon to pose the question: will we lose our tracker mortgage if we rent out our property. Our mort. provider said predictably "yes you would". However, we mentioned that we have reviewed the mortgage offer letter (signed), and no where does it mention that we would lose our tracker if the property was not our PPR. Having heard this, the mort. provider still said that we would lose the tracker.


 
I get the impression that the PPR condition has not be used by many of the mortgage providers until recently. I think it may be included in more recent mortgages - maybe past 2-3 years, but I get the impression that it isnt in a lot of tracker mortgages that are older than this (as with my relative and your contract). When you rang up they didnt know who you were. As their current mortgage contract has the PPR condition, they would have given you the standard answer that this condition is included in their mortgages. I think that if they looked at your specific contract, they'd give a different answer. 

However, my advice to you would be, if its not in your mortgage contract, then there is no reason to highlight the issue with the bank and there is nothing the bank can do about it.


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## FTBtracker

Thank you for your responses. It has provided me with a bit of assurance.
It is clear in the Jan 11 Code, if you own only 1 property it is defined now as your PPR.
It is not clear from the Code if you simply tell the bank you are at risk of arrears you are then covered by the Code for the rest of your mortgage term (ie cant loose tracker) –weather you end in arrears during mortgage life or not. 
Basically, it is not clear if the Code covers those *not actually in arrears.*
I am hoping to fully continue paying principal and interest on my home when I take my new job. Albeit to take up my new job I will no longer be living in my house and I cant sell it.
*It is not clear from the Code if the banks can still take tracker mortgages off people in this negative equity position who are not in arrears and have to move for job reasons to enable them to continue paying their massive mortgage.*
The irony is on a €600k mortgage, if I was put on the Buy to let rate the extra interest of €800 a month would Definitely put me (and most people) in arrears, irrespective of my new job! 

The fact the banks cast a blind eye to this, but are not prepared to state on the record for all in this position that they will not take the trackers off all those in this position at any time during the life of the tracker worries me considerably.
Unfortunately, my trust in Irish Banks got lost along ago. Just cause Banks turn a blind eye to it now, does not mean in 5/10 years that will hold the same blind eye. They may look to charge higher rates on those not living in their Tracker homes if the economic climate improves or if the Banks are not owned by the Government in the future.
This is why it really needs to be on the Record now for piece of mind over the life of the mortgage, before those on Trackers in negative equity living in their PPR move out..
I have now asked the Regulator for the Definitive answer to this pressing issue.
I will revert if I hear anything constructive.
Rob


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## jigsaw

hi FTBtracker

just wondered if you have heard anything back from the regulator on this issue? (i'm in the same boat myself)

cheers


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## Neil_Ireland

What happens if you are on a fixed rate and want to rent out your house?


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