# Is it true that you could lose your Tracker mortgage if you rent the property?



## Questions123 (11 Oct 2011)

In reading the postings I came across someone who stated that in relation to renting a property that a bank can take away your tracker mortgage!!! Can someone please clarify this for me........

And finally - 
_"you may lose your tracker mortgage ._ It depends on your  bank and loan conditions. banks dont like trackers.It costs them money.  If you tell them ,or if they find out that you are not living in your  owwn property then they stick you with a much higher interest rate.  
A couple of percent extra on your loan could wipe out any so-called rental profit."


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## aaa1 (11 Oct 2011)

You need to read your original contract. If it states that the tracker is only applicable if the property is your PPR (principal primary residence - ie, your home), then yes, you could lose it. The other argument is that you could only lose it in this instance if you tell them you're renting out your home


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## Questions123 (11 Oct 2011)

If I register with Sign up to NPPR & PRTB
Register for taxes and appoint collection agent 
Cancel TRS
File tax returns
then they will know what I am not living there right..............


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## Maggs065 (12 Oct 2011)

Questions123 said:


> Cancel TRS
> File tax returns
> then they will know what I am not living there right..............


 
The bank will not know your dealings with the revenue - they're totally separate.


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## huskerdu (12 Oct 2011)

Maggs065 said:


> The bank will not know your dealings with the revenue - they're totally separate.



When the TRS is cancelled, the bank will be informed.


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## ClubMan (12 Oct 2011)

Questions123 said:


> If I register with Sign up to NPPR & PRTB
> Register for taxes and appoint collection agent
> Cancel TRS
> File tax returns
> then they will know what I am not living there right..............


Also when you switch from owner occupier to other (e.g. rented property) home insurance they will probably need and maybe ask for a letter of indemnity from the insurer and find out that way.


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## Maggs065 (12 Oct 2011)

huskerdu said:


> When the TRS is cancelled, the bank will be informed.


 
Doesn't necessarily mean the bank will put you on an investment rate. Didn't in my case. 
My point is unless there is a legal requirement to inform the bank of your changed circumstances, then I don't think it's sensible to be raking up trouble for yourself. I'd say most banks are happy that the mortgage is being paid and probably don't want to jeopardise that.


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## Bronte (14 Oct 2011)

huskerdu said:


> When the TRS is cancelled, the bank will be informed.


 
That doesn't mean anything and is the business of the OP and revenue not the bank, they will be informed by revenue not to deduct it but that is all.


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## Bronte (14 Oct 2011)

ClubMan said:


> Also when you switch from owner occupier to other (e.g. rented property) home insurance they will probably need and maybe ask for a letter of indemnity from the insurer and find out that way.


 
I've switched my home insurance (on investment property) many times and have never informed the bank.  As far as I know they only check it's in place when you take out your mortgage.


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## 44brendan (14 Oct 2011)

You will find that in the majority of home loan agreements there is no clause stating that the property must be used as PPR. I am not aware of any of the major Banks/BS's actively checking for changes in TRS/home insurance etc. This is being raised as a worry issue on a number of occasions and it would be interesting to hear from any contributors who were contacted by a financial institution in this regard.


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## monagt (14 Oct 2011)

Be sure to check your Home Insurance if you move from PPP to rented accommodation.

Its really important if something happens such as Flood or Fire, for example.


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## Macstuff (18 Oct 2011)

I have a tracker with NIB and they have a clause stating that I will lose it and move to their (very expensive) investment rate if I rent out the house.... 
Also, each year since I took out the mortgage (now 4 years) they have contacted me around the renewal time asking me to send in the insurcance cert for the new house insurance. The insurance cert states if the house is insured as my main residence or as an investment property.


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## qs222 (18 Oct 2011)

loan offer with tracker rate states purpose as remortgage.   if i rent the property, am i at risk of losing the tracker?


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## 44brendan (18 Oct 2011)

Remortgage is a purpose of the facility and not a condition. You can remortgage an investment property. See earlier comments on this post. If there is a condition included in the loan Offer that the property must be used as your PPR then the Bank could insist on a change in terms such as putting you on a variable rate if you broke any of the conditions.


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## JPKY (19 Oct 2011)

So in general, filing taxes and registering for the PRTB can't flag to the bank that a property is no longer a PPP ?
I assume if it's a condition of your mortgage contract that you need to notify them and you don't, it's a legal issue but how would they ever find out?


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## WindUp (19 Oct 2011)

They only have to look at the PRTB register. just because they dont today does not mean that they will not do this in the future


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## chippengael (19 Oct 2011)

Macstuff said:


> I have a tracker with NIB and they have a clause stating that I will lose it and move to their (very expensive) investment rate if I rent out the house....
> Also, each year since I took out the mortgage (now 4 years) they have contacted me around the renewal time asking me to send in the insurcance cert for the new house insurance. The insurance cert states if the house is insured as my main residence or as an investment property.


 
I have had the same regular queries from NIB. Presumably they are fishing for ways to get you off your tracker. You may have switched to investment property insurance for example, or forgotten to renew the policy! Either way, the bank appears to be putting the onus on you to prove that you are correctly insured, and I don't think you can do anything about it....


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