# Mortgage to rent



## Thomasz (8 Dec 2020)

Due to underline health problems I have been unemployed for the last 5 years and have been making partial payments of 400 euros without fail a month to the bank of  ireland. The full mortgage amount is 623
a month and there's 12 years left of 30 year term and  2400 arrears because of delays between various marp arrangements over the years. The mortgage balance is 118000 and the value of the house is 90000. The bank has send me a letter staying that they consider my mortgage unsustainable but said that I am suitable for mortgage to rent but I am wondering why the bank has said I can't afford a modified mortgage but are willing to sell it to private housing company for a huge discount as the house will need at least £30000 to bring it up to rental standards. Before any posters attack me for not wanting to pay my mortgage, I like to point out that despite battling  illness for the last 5 years I have always paid 400 euro a month to the bank without fail and find it curious that the bank would rather sell it to a private company for a huge loss but tell me I can't afford even part of my mortgage parked to one side despite paying the interest and part of the capital for the last 5 years.


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## Brendan Burgess (8 Dec 2020)

Hi Thomas



The interest on €118k @2% would be €2,300 and you are paying twice that. So this is a profitable mortgage and it makes no sense for the bank to sell it.

It's a bit out of the control of the banks.

The Central Bank has said that this profitable loan is "non-performing" because it's not performing in line with the original agreement and won't be paid off by the time you are 65.  So the lender has to allocate more capital against it.  It's bonkers stuff, but that is the Central Bank for you.

You have a few options.

Presumably you have applied for a restructure and it has been refused? 

You can battle it out.  Continue paying €400 a month and BoI will probably initiate court proceedings.   It will take them a long time to get an order for possession, and they might not even get them.

We might get some common sense introduced into banking or government by then. 

For example, John Moran, a former Secretary General of the Department of Finance,  has been proposing a solution which would be perfect for you. A fund would buy the loans from the banks and accept long-term interest only.  I have proposed a return to Mortgage Interest Supplement.

I don't know if these will get off the ground. But there is a good chance that there will be a solution of some sort before Bank of Ireland could get you through the courts.

So if you don't want mortgage to rent, then write to BoI telling them so and keep paying the €400 a month.

Brendan


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## Thomasz (8 Dec 2020)

Thanks for the reply, I have no problem with the mortgage to rent but under the scheme according to the government website the maximum amount allowed to bringing a house up to rental standards is £10000. The  banks auctioneer who value the house at £90000 said it would take 30 or 40 grand to make it suitable for renting. Even if the bank are willing to give it away for nothing under the current rules the property isn't suitable for mortgage to rent as their is a £10000 cap on repairs but the bank are starting the process today.


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## David Keogh (1 Apr 2021)

Hi Thomasz,

interested to see how the MTR process is going for you?

I have a few clients that will likely be going the same route.

David


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