# Inform mortgage of letting?



## mrsod (30 Jan 2011)

Hi everybody.

I bought house in march 2008 for 220K, mortgage was 200K. 

I Have been letting out house fully for one year, and was advised against telling bank, so I didnt. 

Only thing is that tenants are pretty bad at redirecting post, as in i have never recieved any. 

The only post going to that address of interest is my mortgage stuff. 

Phoned bank to change address but they need a reason, and if I inform them I am letting out, I will get put to higher interest rate.

 Any suggestions how to re-address post legally?


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## Jim2007 (30 Jan 2011)

You can get An Post to redirect you mail for up to one year here is the link

Or what about a PO Box - usual excuse given to switch  to PO Box, is early access to mail by collecting it at a main post office.

Jim


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## mrsod (30 Jan 2011)

Can I collect it at main post office in my current towm or does it have to be at the post office of the town where the mortgaged house is? I live anout 1 hour from my mortgage property. Thanks for sugggestions


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## LDFerguson (30 Jan 2011)

Have you told your house insurance company?  Letting the property is a material fact as regards the insurance.


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## mrsod (30 Jan 2011)

Yes I have changed insurance to landlord insurance, cancelled TRS, paid NPPR  tax and registered with PRTB, the only part I left out was informing my bank.


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## twofor1 (30 Jan 2011)

I have eBanking and get all statements, correspondence etc regarding my mortgages with NIB via email, is this an option with your bank ?


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## mrsod (30 Jan 2011)

I looked into that but Bank of Scotland Ireland don't do ebanking unfortunately. Any other suggestions would be greatly appreciated?


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## Bronte (31 Jan 2011)

mrsod said:


> The only post going to that address of interest is my mortgage stuff.
> 
> Phoned bank to change address but they need a reason, and if I inform them I am letting out, I will get put to higher interest rate.


 
Then whatever you do don't tell the bank.  Get 12 large brown envelopes, put your current address and stamps on it and ask tenant to pop all your post into it once a month.  You cannnot be getting much correspondance from the bank on the mortgage in any case and get as much as you can electronically.  

Failing that collect the post once a month, you surely need to check the house once a month.


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## paddyc (31 Jan 2011)

I am currently looking into renting out my current property and buying another. We currently have a tracker mortgage, while not the best tracker rate its still a lot better than current variable rates. We are not looking to take out the 2nd mortgage with the same bank so they won't know about it, however if we tell them our plans as we will have a new address can they make us change our mortgage type ? Our current tracker is with BOI


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## FlippedOut (1 Feb 2011)

Afternoon,

Just the post I need!!

I just read your post on the whole advising banks your letting your property.

We are just about to move to Spain with my job, and will be renting out the family home. 

You mentioned that you changed your insurance to Landlord insurance. Do the insurance company not have to  notify the bank when there is a change of insurance?

And when you cancelled TRS, did the bank not question why this was done?

Sorry for all the Q's........ And thanks in advance,


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## mrsod (1 Feb 2011)

When I changed insurance, themcompany posted something to me with the policy, and mentioned something about sending it to bank, I have yet to do that! And the TRS was cancelled just before christmas and I haven't heard anything from bank yet. Was renting for a year before I realised I had to do TRS, Insurance change, NPPR thing, and the PRTB thing. I was clueless about the whole thing and it was a burst pipe in rented property that made me realise all the things I didnt have done or filled out or paid. So before you go to spain, chech out irishlandlord site, its very informative and answers lots of questions. I dont know if i can avoid bank finding out, not sure what penalty would be applied if they did. Any advice from anybody else?


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## FlippedOut (1 Feb 2011)

Thanks a million for getting back and with the answers.

Its just the loss of the TRS with things already being very tight (hence the move to Spain) 

I take it that once the mortgage company know that its being rented then the interest rate will go up?


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## mrsod (1 Feb 2011)

i assume interest rate will go up if house becomes rented property, I am too scared to ask bank because they may ask for my details, then they may record phonecall which could get me in trouble later.


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## Troy McClure (1 Feb 2011)

You inform revenue to cancel TRS. They will cancel it.

Remember TRS is only for your principal residence and is illegal if claimed otherwise. Most banks are happy enough as long as your mortgage is been paid.


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## muffin1973 (22 Feb 2011)

MrsOd, I was wondering that too, that if the TRS was cancelled, as it is applied by the bank surely they would question why you're cancelling it?  Also could I ask you was the landlord insurance much more?  I know about the PRTB but what's the NPPR if you don't mind??

We want to move house (rent ours out and rent somewhere else) and the only thing stopping us is that we have a tracker and everyone's telling us we'd be mad to give it up - which I know, but we really want to move and I'm not sure how it's going to work.  I know we have to cancel the TRS, but I would have thought that would flag it with the bank and with banks trying to get those of us on trackers off them, wouldn't they get in touch and see what was going on??  Am headwrecked with it all...

M


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## markpb (22 Feb 2011)

muffin1973 said:


> We want to move house (rent ours out and rent somewhere else) and the only thing stopping us is that we have a tracker and everyone's telling us we'd be mad to give it up - which I know, but we really want to move and I'm not sure how it's going to work.



I'm in the same boat so I asked my solicitor for a copy of my loan agreement (with ICS from 2005) to see if there was any mention of that in it. So far I haven't seen anything so maybe not all tracker mortgages were limited to PPRs?


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## muffin1973 (22 Feb 2011)

Maybe not Mark, I have read threads on here before where there is no mention of having to been the PPR in your property to retain the tracker, but in ours it's very clear - we got a copy from our broker. You're lucky yours doesn't mention it...

M


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## Bronte (23 Feb 2011)

TRS is a tax relief.  It is between the tax payer and revenue.  It is faciltiated by the banks by being deduced by them.  But it is not their business.  Your tax affairs have nothing to do with the bank.  If you cancel it with revenue the bank cannot ask you any questions about it.  

If you change house insurance contract and thereby have a new company and the bank have to be on notice, make sure that notice doesn't mention that it is landlord insurance.  

There is only one problem and it doesn't apply to all mortgages only some.  In 5 or 10 years time if the banks discover that you had become a landlord nobody knows what they will do or what rights they will have.  

For those changing from TRS to mortgage interest relief.  There is a misperception that they are losing out.  Mortgage interest relief for rental properties is a much higher relief than TRS so don't make the mistake that your costs are going up in relation to that particular aspect.  There is of course tax on rental income and all the other things but that's for another thread.


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## muffin1973 (24 Feb 2011)

Bronte, thanks so much for all that, very interesting. Forgive my ignorance but I thought TRS and mortgage interest relief was the same thing??  You're saying that we could claim mortgage interest relief if we rented out the house?

Good point about the bank finding out in a few years, that would not be good.

thanks

M


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## mrsod (26 Feb 2011)

What is the worst the banks can do if they found out? Im with Bank of Scotland Ireland, so I am assuming they are just grateful that Im repaying the loan every month. The only problem is trying to get the postal address changed withoug creating suspicion. Tenants dont seem to re direct my post.

Muffin 1973, the NPPR thing is something I didnt know about until recently so I ended up paying the late fee. It is a tax on your Non Primary Principal Residence, its 20o Eure with a 20 fine for each late month.


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## twofor1 (26 Feb 2011)

mrsod said:


> What is the worst the banks can do if they found out?


 
Assuming the bank are entitled to charge a higher interest rate if your home becomes an investment property;

Could they charge the higher interest rate retrospectively if they discover at some future time that this happened in 2010. 

With investment rates typically 1% higher than standard rates, this could mean an additional €1K being added to your mortgage for each €100K owed, for each year they did not know about the change.

Whether realistically this would ever happen or not, who knows, possibly as you say they are happy to be getting payments at the PPR rate today, but they might not always think like this.

Personally I would be aware of this as a possibility and continue to keep my mouth shut.


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## muffin1973 (27 Feb 2011)

Mrsod have you tried the An Post thing of forwarding on your post? Think that's what we'd do... Well not sure what the banks would do, my husband thinks the same as you that they'd just be glad we're still paying the mortgage, I'm just a worrier   Thanks for the info re the NPPR...

Twoforone, yeah that's what I'm worried about...

M


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## walshie50 (27 Feb 2011)

*Similar problem*



mrsod said:


> What is the worst the banks can do if they found out? Im with Bank of Scotland Ireland, so I am assuming they are just grateful that Im repaying the loan every month. The only problem is trying to get the postal address changed withoug creating suspicion. Tenants dont seem to re direct my post.
> 
> I have been reading all of your replies. They have been informative but for me the basic question still hasnt been answered...maybe no one knows the answer. I have looked everywhere to no avail. I have a tracker and my agreement states its for an owner occupier. I have to move with my job and want to let the house to help pay the mortgage. I also want to have it all above board by paying tax etc. My big worry is if the bank find out I am letting the property that they might try take away my tracker... It could be as you say that they bank would be happy just that the mortgage is being paid ....but how can I find out for sure?


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## walshie50 (27 Feb 2011)

Can you assume that the banks would charge more if the property becomes a rental one? Is there a precedent?


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## twofor1 (27 Feb 2011)

..


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## twofor1 (27 Feb 2011)

walshie50,

Looks clear to me, if you are not an owner occupier, then you are not entitled to your tracker rate.

Whether you choose to tell them, or will they find out is another arguement.


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## lionstour (27 Feb 2011)

walshie50 said:


> mrsod said:
> 
> 
> > but how can I find out for sure?


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## lionstour (27 Feb 2011)

mrsod said:


> When I changed insurance, them company posted something to me with the policy, and mentioned something about sending it to bank, I have yet to do that!


 


I would look into this issue in detail before you send that letter. They could find out about your change of circumstances if you do this.


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## RMCF (27 Feb 2011)

I have recently rented out my house, and I'll be saying nowt to the bank.

I will pay the PTRB and NPPR fees of course, and all my taxes, but I'll be leaving it up to the bank to find out themselves. If they do, fair play to them.


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## Bronte (28 Feb 2011)

walshie50 said:


> Can you assume that the banks would charge more if the property becomes a rental one? Is there a precedent?


 
Yes they charge more, just look up their websites.  During the Tiger they in general did not as they were too busy dishing out money.  Banks are in dire need of income and investment rates are one way of getting it.


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## mrsod (28 Feb 2011)

Hi RMCF, You mentioned you recently rented out your house but have not told bank. But do all your bank correspondance go to the rented house or have you changed address? Or do you just trust tenants to forward post on?


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## RMCF (28 Feb 2011)

mrsod said:


> Hi RMCF, You mentioned you recently rented out your house but have not told bank. But do all your bank correspondance go to the rented house or have you changed address? Or do you just trust tenants to forward post on?



To be honest I changed all my correspondence to my new address, with the exception of anything related to my original mortgage at that 1st address. 

I do trust my new tenants to keep any literature that they send out, which tends to be very little to be honest, usually the odd statement, which often is only yearly. 

I just told them that I may still get some mail to the old address and could they gather it up and text me when they want me to collect it. Hopefully this should stop them finding out about the property now being rented.


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## csirl (1 Mar 2011)

A relative of mine recently had to move for work reasons, but didnt want to sell her PPR as market bad,  not sure if new job/location will work out etc. She's renting at her new location and renting out her own house.

She's on a tracker with one of the major banks. Her contract only had references to the effect that the loan was for a private residence belonging to her. It was silent on the issue of renting or owner occupation - so she took it that it is ok to rent out the house as it conforms with the private residence condition.


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## walshie50 (2 Mar 2011)

*inform mortgage of letting*

There seems to be a lot of us in the same boat... I got a friend who works in business to ask a bank manager for advice on this. The answer was that the contract was binding.. I understand from questioning the friend this means that the tracker contract is binding and that they cannot change that.... still I think from reading all the advice given here that saying nothing to the mortgage provider is the safest thing. I will get the tenants to forward any post from the bank .. it should be just once a year ...and be careful of the wording on any insurance cover before forwarding it. I would be happier to know everything was above board but I really cant risk losing the tracker.. at least this way I can make my repayments. Without the tracker rate its doubtful I would be able to make repayments especially as the rates are due to rise. 
Thanks to all for the helpful advice. Isnt it awful to be put in this position!


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## mrsod (3 Mar 2011)

When I insured the house for landlord insurance they sent me my policy and they monetioned something about sending something to the bank. Do the bank need copy of insurance policy to justify pay out in the event of a fire (touching wood as I type) . The insurance form mentions house is let out.


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## easylife (15 Jan 2012)

Bronte said:


> In 5 or 10 years time if the banks discover that you had become a landlord nobody knows what they will do or what rights they will have.



For those who are thinking of sitting it out with their fingers crossed, and hope the bank doesnt notice, I wonder is the Statute of Limitations relevant here for a Breach of Contract, the limit for which is 6 years?

Likewise, if Stamp Duty should have been repaid if property rented/sold within the clawback period, but wasnt, would the St. of Lim of 10 years be relevant for tax evasion?


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## jigsaw (29 Jan 2012)

For those of you who state your just not going to tell the bank, please remember that all rental properties registered with the PRTB are listed online here

All is takes is a bank official to view the PRTB website and check which rental properties are still on trackers
https://prtb.ie/public_registrations.aspx


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## Bronte (30 Jan 2012)

easylife said:


> Likewise, if Stamp Duty should have been repaid if property rented/sold within the clawback period, but wasnt, would the St. of Lim of 10 years be relevant for tax evasion?


 
There is no statute of limitations for taxes.  So now you've racked up plenty of penalties and interest.  Two choices, ignore or deal with it.


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