# Will I lose tracker Mortgage if I let out my apartment?



## Van der Hoop

Hi There,

I currently have a good tracker mortgage with AIB on our apartment. We are planning to rent out the apartment and buy a house in the next few months.

My plan is to get mortgage approval with a different bank as I am worried if I apply to AIB and mention my intention to rent out the apartment they will try and switch me off the tracker.

If I apply to a different bank, is it likely they will notify AIB??


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## Macstuff

Hi Van Der Hoop,

There was a very good discussion on this issue within the "Mortgages and buying and selling homes section" earlier on this year / late last year. Do a search and you will see it - sorry I don't know how to link to it. 

Re your situation there is a chance that AIB may try to take you off the tracker if you rent the apt. there's also a chance that they won't. It seems to be different from bank to bank. I know my bank NIB would take me off mine in this scenario. Have you looked at your mortgage terms and conditions? 

If you do apply to another bank they will obviously know you have a mortgage with AIB - they will see it on your credit report and your current account. However they won't tell AIB of your application.


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## Van der Hoop

Thanks Macstuff,

That's what I figured... I reckon it's worth the risk. Yep , it states in the T&C's that it is for Prinicipal Place of Residence.

I reckon if I applied directly to AIB they may look into it. If I use another bank chances are they wont be contacting AIB and as long as they are getting their regular payment.


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## Brendan Burgess

Here is the Key Post to which Mac refers: 

http://www.askaboutmoney.com/showthread.php?p=1056392#post1056392


Macstuff

You can see how to post links to other posts at 



Brendan


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## Jim2007

Van der Hoop said:


> I reckon if I applied directly to AIB they may look into it. If I use another bank chances are they wont be contacting AIB and as long as they are getting their regular payment.



And if and when AIB runs their next credit check on you, what will happen.... don't assume that they only do this when you are applying for a loan.

Jim.


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## Van der Hoop

AIB have no reason to run a credit check on me...I dont have a current a/c with them and no other loans.


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## Van der Hoop

Thanks Brendan!


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## Jim2007

Van der Hoop said:


> AIB have no reason to run a credit check on me...I dont have a current a/c with them and no other loans.



Of course they have!  As part of their normal credit and risk management activities, they regularly review lines of credit on a random selection of account holders these days.   In fact credit and risk management is the one are of banking that is still actively recruiting throughout Europe!

Jim


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## Van der Hoop

yeah - I reckon AIB have more urgent issues for their credit and risk management departments than having the luxury of credit checking random mortgages which aren't in arrears...

Anyhow, I have to take the risk or else never buy a place for the next 25 years...


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## Panacea

Presumeably you intend to pay the tax due on the rental property, in which case you would not be entitled to TRS on the mortgage and would have to notify your bank accordingly.

You would also have to register with PTRB, change your insurance to cover landlords/tenants issues, change utility billing info .... any of which could come to the attention of your bank as they could in theory notice new utility account numbers or the additional insurance cost / or additional policy payment.

They would also end up seeing the new mortgage (and other bills) being repaid each month if your bank account is currently with AIB unless you go to the hassle of opening a new account and get rent paid into that account and pay new mortgage from there ...

Better to be up front at the outset imho.


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## Van der Hoop

I don't think the banks have quite the advanced monitoring capabilities you are suggesting...I'm not sure how you think they are checking utility bills??

Yes , my current account is not with AIB.

The PRTB will not be talking to the bank. My only risk is when I ask the revenue to cancel my TRS that they inform the bank and this raises a flag..


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## aristotle

Other rish is that your bank may be named as an interested party on your house insruance policy. If you change your policy to reflect that it is rented out then the bank may know this way.


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## 44brendan

I wouldn't be overly concerned about credit checks on compliant customers who are not requesting new facilities. As a banker we have more than enough on our plate in dealing with delinquent borrowers. If loan repayments are on line then there will be no credit checks completed.
There seems to be a lot of concern re unilateral actions from Bank to take clients off Tracker rates where there is a change in use of the associated property. In most cases there is a condition in the mortgage documentation where this can be done but in reality unless the "bank" are put specifically on notice that the term has been breached no action will be taken. Brach of a term can not lead to a retrospective removal from tracker rates so even if the Bank was put on notice of the change following some years of a pDH being rented out they could only change the rate from the time that they were made aware of the breach.


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## Van der Hoop

Thanks Brendan44, that's exactly the information I was looking for


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## confusedude

Van der Hoop said:


> Thanks Macstuff,
> 
> That's what I figured... I reckon it's worth the risk. *Yep , it states in the T&C's that it is for Prinicipal Place of Residence.*
> 
> I reckon if I applied directly to AIB they may look into it. If I use another bank chances are they wont be contacting AIB and as long as they are getting their regular payment.



Do you mind me asking where are these T&C's ? Are they in the signed loan agreement ? Or is there a Tracker T&C's document. The reason I ask is that I'm in a similar situation to yourself but I can't find any mention of PPR in my loan agreement.


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## Van der Hoop

it's in my loan agreement, if there is no specific mention it may not be there if your lucky


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## Panacea

Panacea said:


> You would also have to register with PTRB, change your insurance to cover landlords/tenants issues, change utility billing info .... any of which could come to the attention of your bank as they could in theory notice new utility account numbers or the additional insurance cost / or additional policy payment.


 


Van der Hoop said:


> I don't think the banks have quite the advanced monitoring capabilities you are suggesting...I'm not sure how you think they are checking utility bills??


 

Given that you have indicated your current account is not with AIB then most of the points I raised are not of any relevance for you now thankfully  

With regard to the level of monitoring capabilities I think you would be surprised at the ledger insights that the bank have at their disposal.

As aristotle has also pointed out assuming you change your insurance to landords insurance the bank is likely to be notified of the change by the underwriter. What I was referring to regarding utility bills was that if they see new utility bills being paid by direct debit through your bank account or if they see you setting up online payments through online banking to a new utility account it may raise questions if other issues such as changes in insurance etc are appearing at the same time.


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## confusedude

Van der Hoop said:


> it's in my loan agreement, if there is no specific mention it may not be there if your lucky


 

What page of the loan agreement is it on ? I want to be sure that my AIB loan agreement document is different to yours. If so we might be able to pinpoint when (if) AIB made the changes and alert others to the fact.

(  post #12 refers: 
www.askaboutmoney.com/showthread.php?p=1177247#post1177247)


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## beffers

Agree with the above post 100%. Just because you can not think of a valid reason for Big Brother Banker to be watching you, that does not mean that they are not. 

It's not just about mortgages and banks looking for people who are in default or no longer living in their PPR, the banks sales and marketing departments are also on the lookout for people to lend to who don't really need the money. They want to target new or more advanced products (credit cards mainly) to people who they know have a good track record of paying their bills on time. That is how they make their money, even in these difficult times. It is not true that banks are not lending. They are, they are just being more selective about it. 

I have only had an account with the Bank of Ireland for two years, yet this week I got a letter from them recently telling me that my credit card spending limit had gone up by a grand. Over the past 2 years, some body some where (or some computer data base) was watching me, watching my accounts, watching my spending records, watching my healthy savings record, watching my lack of debt, watching my credit report, watching me my paying my bills on time, watching my lack of an overdraft, watching my lack of bounced cheques, pretty much watching me do everything but sleep and brush my teeth. This happened without me doing anything (such as apply for a loan or credit there or else where) that would bring myself to their attention. It is only a matter of time whether our names get put on someones desk, whether we want it to or not.


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## marksa

beffers said:


> ...Bank of Ireland for two years, yet this week I got a letter from them recently telling me that my credit card spending limit had gone up by a grand. ...


 
I thought this kind of unlilateral increasing of credit card limits was outlawed some years ago as it was often used as a means of increasing the amount of debt, and therefore interest payable, for people who were not so inclined to clear their cards monthly.


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## Panacea

MrDerp said:


> Be careful with your assumptions. I work in the area of Data Warehousing / Business Intelligence and I can tell you this isn't so far fetched.
> 
> ..... summary information is gathered about all potential risk and it is scored.


 
This is precisely the point I was trying to make. There is substantial information available that is now being used and reviewed on a more frequent and comprehensive level than before. Without going into too much detail I am familiar with numerous cases where this approach is being adopted by financial institutions on a wide ranging basis.

Just because Van der Hoop may not think the banks use the various sources of information available to them or preferred the response he got from 44brendan does not negate what is in reality being done on an increasing scale and that something could very easily be picked up from a seemingly innocuous source.


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