# ptsb Buy to let mortgage review after 12 years



## suicra05 (18 Oct 2019)

Received a letter from PTSB saying they want to review my Buy to let mortgage and I have 10 days to reply.
It is a tracker .80%, taken out July 2007, interest only for 382,000. The property at present is worth circa 360,000 and is producing a rental income. I have never missed a mortgage payment.
They have given me 3 options: change to capital and interest mortgage, move to part capital and interest or Interest only until next review date.
I want to stay interest only at all costs. I have to produce my financial records to prove that I have a plan to pay off mortgage at final date which is in 2032. Ultimate plan would be I could sell property in 2032 and repay the mortgage.   Will they accept this plan?  Can they make me change to another type of mortgage? Can they increase my present tracker rate? Any assistance would be appreciated.


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## NoRegretsCoyote (18 Oct 2019)

What is the gross and net income rental income you get?


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## elcato (18 Oct 2019)

Just tick option 3 and see what they send back to you.


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## Brendan Burgess (18 Oct 2019)

Hi Suicra

What does your contact say? 

If it says interest only for the full term, then they can't switch you to capital and interest.

However, it probably says interest only for 5 years and then subject to review.  In which case, take the elcato option, Just tick box 3.

When they come back to you, show them the valuation of the property and tell them you will sell it on maturity.

Brendan


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## Bronte (19 Oct 2019)

This is a bit of a risky strategy given the property is still worth less than the mortgage.  Though the OP has 25 years of rental  taxes and the interest payments. Risky as in what if at the crunch moment of selling we’re in a property crash.


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## cremeegg (19 Oct 2019)

[QUOTE="suicra05, post: 1630170,
. I have to produce my financial records
[/QUOTE]


whosays this. 

Is it in your contract or did some clerk in PTSB just decide they want you to. 

I would write back querying this point. Unless you are contractually obliged to provide information which I very much doubt then info do not answer their questions


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## Luternau (19 Oct 2019)

I am surprised they are only getting to you now. A lot of PTSB reviews of BTL trackers happened in 2010/2011. I doubt you have a tracker for the full term, but if you do, then you are OK. 

Most likely they are looking to see that your plan is to repay this and what your current means are.


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## Susie2017 (19 Oct 2019)

Surprised how PTSB can do this. If it's interest only for the term then surely it's not their concern until near that term I.e 2032. I know an individual with similiar interest only arrangements on several properties with Danske. They have had no such contact even though their term expires within the next 5 years and are in negative equity.


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## RedOnion (21 Oct 2019)

It's clause 7 of a standard PTSB BTL contract. I'm almost certain it's been discussed around here somewhere previously:

"*Clause 7*: “Permanent tsb reserves the right to review the deferral of the repayment of principal at any time during the term of the loan, including the first three years of the term and may require the applicant to cease the interest-only repayment and require the repayment of principal and interest and the applicant will immediately arrange to pay the revised monthly repayment comprising the repayment of principal and interest calculated over the remaining term so that the principal and interest will be discharged within the existing term of the loan."


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## suicra05 (2 Nov 2019)

Update on my post. I contacted PTSB by phone, they were looking to see if I could repay at end of mortgage. Filled out mortgage review form, included all income, proof of sufficient savings to cover any potential loss on property, proof of 2 sales of similar property from property register. Sent it all off. They came back to me within 2 days of posting by telephone. Gave me the all clear, told me there now will be 2 year reviews for remaining of mortgage. All worked out well and they did not touch my tracker mortgage or the rate.
Happy days!


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## Deaneo (16 Dec 2019)

Hi,
I recently received a PTSB Review letter with 3 options - (a) Switch to Capitol & Interest (b) Part pay down Capitol or (c) Stay on Interest only.
They are requesting some serious financial details - Salary, Savings, Sell-off of other property as options to clear down the mortgage(s). All to be returned within 10 working days on penalty of an automatic switch to Capitol & Interest if I don't.
How can I check or where can I go to, to confirm if PTSB can switch my mortgage to Capitol & Interest.
Thanks...


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## George12 (16 Dec 2019)

Discussed elsewhere under mortgage arrears and also property investment. They would appear to generally have a right to enforce capital repayments after a specified period. They may not do this for example if you show the value of the property exceeds the mortgage or if you have savings to cover any negative equity. There does not appear to be many concluded cases yet. In terms of checking you would need to review your loan offer, solicitor may have it if you don’t.


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## Deaneo (16 Dec 2019)

Hi George...
Thanks - I have all details of the Loan offer & Special Ts & Cs but who can examine the contents & advise given the past debacle on Trackers in general since 2011. In particular the Letter of Approval contains "The loan is an interest only loan for the duration of the term and the capital will be paid in full at the end of the term". Also an  Amortisation Table shows a final payment in last year.


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## RedOnion (16 Dec 2019)

Is it a buy to let?

Does clause 7 exist?
"*Clause 7*: “Permanent tsb reserves the right to review the deferral of the repayment of principal at any time during the term of the loan, including the first three years of the term and may require the applicant to cease the interest-only repayment and require the repayment of principal and interest and the applicant will immediately arrange to pay the revised monthly repayment comprising the repayment of principal and interest calculated over the remaining term so that the principal and interest will be discharged within the existing term of the loan."


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## Metatron (16 Dec 2019)

I think Walter Odlum solicitors took a test case on behalf of PTSB borrowers on this very issue  and won.


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## George12 (16 Dec 2019)

I think this round of letters is more to do with the bigger picture of paying off capital. Walter Odlum focused more on the appropriate interest rate to be applied.


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## Deaneo (17 Dec 2019)

RedOnion said:


> Is it a buy to let?
> 
> Does clause 7 exist?
> "*Clause 7*: “Permanent tsb reserves the right to review the deferral of the repayment of principal at any time during the term of the loan, including the first three years of the term and may require the applicant to cease the interest-only repayment and require the repayment of principal and interest and the applicant will immediately arrange to pay the revised monthly repayment comprising the repayment of principal and interest calculated over the remaining term so that the principal and interest will be discharged within the existing term of the loan."


Yes and Yes to both questions. Who can provide me with a review of the paperwork & a definitive Yes/No?


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## RedOnion (17 Dec 2019)

There have been court cases over the clause. I can't see you getting much benefit from someone looking at it.

Have a look at the following thread. Someone who's been through the process you're now presented with:





						ptsb Buy to let mortgage review after 12 years
					

Received a letter from PTSB saying they want to review my Buy to let mortgage and I have 10 days to reply. It is a tracker .80%, taken out July 2007, interest only for 382,000. The property at present is worth circa 360,000 and is producing a rental income. I have never missed a mortgage...



					www.askaboutmoney.com


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## Deaneo (17 Dec 2019)

RedOnion said:


> There have been court cases over the clause. I can't see you getting much benefit from someone looking at it.
> 
> Have a look at the following thread. Someone who's been through the process you're now presented with:
> 
> ...


Hi There,

Thanks for the info - saw it before and the person volunteered the disclosure of personal financial info which seems compulsory - again under the threat of being switched to Capitol & Interest. Depending on IF they can or cannot make such a switch will determine my response.


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## Deaneo (17 Dec 2019)

suicra05 said:


> Update on my post. I contacted PTSB by phone, they were looking to see if I could repay at end of mortgage. Filled out mortgage review form, included all income, proof of sufficient savings to cover any potential loss on property, proof of 2 sales of similar property from property register. Sent it all off. They came back to me within 2 days of posting by telephone. Gave me the all clear, told me there now will be 2 year reviews for remaining of mortgage. All worked out well and they did not touch my tracker mortgage or the rate.
> Happy days!


Hi,

I saw your post & am in the same situation - I received a similar letter with the same options. What was their focus in your communications with them by phone and did they threaten you with a switch to Capitol & Interest payments?
 Thanks


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## suicra05 (3 Jan 2020)

Deaneo said:


> Hi,
> 
> I saw your post & am in the same situation - I received a similar letter with the same options. What was their focus in your communications with them by phone and did they threaten you with a switch to Capitol & Interest payments?
> Thanks


I phoned and they were actually very helpful. They did not threaten to switch me to Capital and Interest.


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## Deaneo (13 Jan 2020)

suicra05 said:


> I phoned and they were actually very helpful. They did not threaten to switch me to Capital and Interest.


Hi,

Many thanks for your reply. I contacted them (by phone) and they clarified what they needed & their position. Their focus seems to identify mortgages that are in bad shape (negative equity) and in need to additional resources in order to secure the debt(s) in question. We agreed to disagree on some issues and I await their review outcome. Like you there will be similar follow-up reviews every 2 years or so. 

I also asked if PTSB are likely to encourage customers to clear mortgages & offer discounted full & final settlements? No was the current position so I suggested Management should re-consider this as an option for those who have the means...


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## Aardvark (24 Feb 2020)

Hi,
I am in a somewhat similar position having received the same letters, being 14 years in to 25 year int only trackers regarding four investment residential properties. 
I filled in the forms, along with valuations from recent sales taken from the price register which showed I was at about break even, not in negative equity but not positive either. I explained that I wanted to stay on interest only and expected capital appreciation over the next 10 years to give some equity plus I would be at retirement age and intended downsizing my by then mortgage free PPR. They decided my situation was unsustainable
and have asked me to voluntarily surrender or sell all four properties! Their reason being that my loan to values are greater than 75 %.  The loans were originally agreed on 80% loan to values. The loan to values are currently at their best over what they have been over the last decade so why , after 15 years without missing a payment are they being so heavy handed?


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## NoRegretsCoyote (24 Feb 2020)

@Aardvark

Default rates on BTL properties in Ireland are appalling. My guess is that these mortgages are not very profitable for them given the risk weights attached.

Ironically there was no point asking you to sell when the properties were in negative equity, but there is now that you are no longer underwater!

Can they oblige you to sell the properties? I am not the expert but suspect it's a bluff on their part. Once you continue to service the mortgages I doubt they will take legal action.


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## RedOnion (24 Feb 2020)

NoRegretsCoyote said:


> Can they oblige you to sell the properties? I am not the expert but suspect it's a bluff on their part. Once you continue to service the mortgages I doubt they will take legal action.


There's a clause in standard PTSB BTL contracts (clause 7) that allows them to revert the mortgage to capital & interest. That might make the mortgages unsustainable, forcing the borrower into default.
I can't find a full contract to check all the clauses at the moment, but I definitely wouldn't assume it's a bluff without checking all the clauses they're relying on.


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## NoRegretsCoyote (28 Feb 2020)

This article in the Times might be relevant:



> The State’s former top mortgage lender highlighted this week, as it reported its full-year results, that 17 per cent of its performing mortgage book – equating to about €2.6 billion – is made up of loans doled out during the boom years where borrowers only have to meet interest payments until the loan period comes to an end. At that point, the principal falls due at once.
> 
> *The bank has begun to ask borrowers how they plan to make these end-of-term payments so it can assess what level of defaults can be expected from the portfolio.*
> 
> And even though borrowers may continue to meet their loan arrangements, the bank, under rules brought in following the financial crisis, may have to start classifying interest-only mortgages as non-performing loans (NPLs) if borrowers don’t come back with credible capital repayment plans.


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## Isobel (2 Feb 2021)

Aardvark said:


> Hi,
> I am in a somewhat similar position having received the same letters, being 14 years in to 25 year int only trackers regarding four investment residential properties.
> I filled in the forms, along with valuations from recent sales taken from the price register which showed I was at about break even, not in negative equity but not positive either. I explained that I wanted to stay on interest only and expected capital appreciation over the next 10 years to give some equity plus I would be at retirement age and intended downsizing my by then mortgage free PPR. They decided my situation was unsustainable
> and have asked me to voluntarily surrender or sell all four properties! Their reason being that my loan to values are greater than 75 %.  The loans were originally agreed on 80% loan to values. The loan to values are currently at their best over what they have been over the last decade so why , after 15 years without missing a payment are they being so heavy handed?


Hi 
What has happened since you were advised to sell the 4 properties? Did they give you an option to increase repayments to part capital & interest ! I just submitted my paperwork 
Any update would be appreciated 
Thanks


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## George12 (3 Feb 2021)

I would be curious to hear too. I submitted my paperwork about a year ago. They decided I had the ability to pay (but I am pretty confident that if an individual applied for a new mortgage of a similar amount with my income they would be declined!). Anyway I pointed out that they should have come back 8 years previously when the 5 year interest only period was up and I also reminded them that I had volunteered to pay off a small amount of capital every month in 2013 but was refused that option. They couldn’t find any correspondence on their system in this regard and the branch I dealt with is now closed. To achieve closure I offered half of the monthly amount of capital they were seeking. They turned that down and I have not heard from them since so as it stands I am still on interest only.


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## Isobel (3 Feb 2021)

George12 said:


> I would be curious to hear too. I submitted my paperwork about a year ago. They decided I had the ability to pay (but I am pretty confident that if an individual applied for a new mortgage of a similar amount with my income they would be declined!). Anyway I pointed out that they should have come back 8 years previously when the 5 year interest only period was up and I also reminded them that I had volunteered to pay off a small amount of capital every month in 2013 but was refused that option. They couldn’t find any correspondence on their system in this regard and the branch I dealt with is now closed. To achieve closure I offered half of the monthly amount of capital they were seeking. They turned that down and I have not heard from them since so as it stands I am still on interest only.


Well that’s  interesting you never heard back .. I hope the same happens to me ! I am so worried over it .. I have 6 in the portfolio .. can I ask how many you have .. I just noticed from various threads people with one property in negative equity seem to be kept on interest only and portfolios in positive equity are refused.. they told me they need 25% ltv which is way to high


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## PebbleBeach2020 (4 Feb 2021)

Isobel said:


> Well that’s  interesting you never heard back .. I hope the same happens to me ! I am so worried over it .. I have 6 in the portfolio .. can I ask how many you have .. I just noticed from various threads people with one property in negative equity seem to be kept on interest only and portfolios in positive equity are refused.. they told me they need 25% ltv which is way to high



Can you give details of the properties, loans, amount outstanding, rates, maturity dates,rental income etc. Can give advice with full information.


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## DublinHead54 (4 Feb 2021)

I may be wrong but from the tone of these posts some BTL interest only holders have been using the income to fund lifestyle. I am basing this on what seems to be the ineligibility to switch to capital repayments or ability to meet shortfalls if mortgages are sold.

The big question I have is when you eventually have to repay the mortgage you're going to lose that rental income, can you survive without it?


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## hanorac (4 Feb 2021)

Some advice please.
I'm after getting a review request from the bank on an interest only BTL mortgage i got many years ago, we are half way through the term approx.
Firstly i wasn't expecting to get this but they want to offer to move me to capital payments or see what my plan is to pay if off when the time comes,
I have assets to cover the mortgage but they send me a form to say its our primary residence (we are currently living in the property but plan to rent it out again soon)
I'm suspicious that if I sign that form that we will lose the BTL Interest only tracker mortgage, is there a period of time i can live in my btl without having to change the mortgage?
Has anyone any other advice as to how to proceed.


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## Brendan Burgess (4 Feb 2021)

If you have a home loan and you let it, you could have to move from a home loan rate to a buy to let rate. 

I have not heard of someone on a buy to let rate being reviewed because they are now living in it.

Again, check the contract. It's very unlikely that it says that they can remove the tracker if you live in it.  

Brendan


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## hanorac (4 Feb 2021)

Thnx Brendan    ptsb


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## Brendan Burgess (4 Feb 2021)

So, is a reasonable summary of this thread the following: 

ptsb wants to make sure that you will be able to pay off the loan when the term ends.
If you can show them that it's in positive equity or that you have other assets, they will be happy and won't switch you to capital and interest. 
If you are in negative equity and can't show them how you will pay off the loan, they will ask you to sell the property as the mortgage is  not sustainable. 
In either case, they could switch you to capital and interest under the contract, in which case you would either have to pay or go into arrears. 
You could challenge their right to switch you to capital and interest. 

*Basis of challenging their right to switch you to capital and interest *
While the contract is clear that they can do a review after 3 years, the illustration was for a one off payment at the end of term.


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## Isobel (5 Feb 2021)

Brendan Burgess said:


> So, is a reasonable summary of this thread the following:
> 
> ptsb wants to make sure that you will be able to pay off the loan when the term ends.
> If you can show them that it's in positive equity or that you have other assets, they will be happy and won't switch you to capital and interest.
> ...


Thanks Brendan 
I spoke with them yesterday and that’s exactly the process ..


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## Isobel (5 Feb 2021)

Dublinbay12 said:


> I may be wrong but from the tone of these posts some BTL interest only holders have been using the income to fund lifestyle. I am basing this on what seems to be the ineligibility to switch to capital repayments or ability to meet shortfalls if mortgages are sold.
> 
> The big question I have is when you eventually have to repay the mortgage you're going to lose that rental income, can you survive without it?


Absolutely not the case for me
The mortgage were granted on the basis of interest only for the term ..  it’s not funding  lifestyle .. from the initial draw down the rents would never have covered full capital
My portfolio is working well and additional profits are constantly re invested in the properties keeping them to an excellent standard and that’s why my tenants are with me more than 10 years plus .. I offer very fair rental rates .. a lot lower than market value as a good tenant is invaluable.. it works both ways


Dublinbay12 said:


> I may be wrong but from the tone of these posts some BTL interest only holders have been using the income to fund lifestyle. I am basing this on what seems to be the ineligibility to switch to capital repayments or ability to meet shortfalls if mortgages are sold.
> 
> The big question I have is when you eventually have to repay the mortgage you're going to lose that rental income, can you survive without it?


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## Leo (5 Feb 2021)

Isobel said:


> My portfolio is working well and additional profits are constantly re invested in the properties keeping them to an excellent standard and that’s why my tenants are with me more than 10 years plus .. I offer very fair rental rates .. a lot lower than market value as a good tenant is invaluable.. it works both ways



Re-investing all profits in the properties and keeping rents a lot lower than market sounds like a poor, if not unviable business model.


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## DublinHead54 (8 Feb 2021)

Isobel said:


> Absolutely not the case for me
> The mortgage were granted on the basis of interest only for the term ..  it’s not funding  lifestyle .. from the initial draw down the rents would never have covered full capital
> My portfolio is working well and additional profits are constantly re invested in the properties keeping them to an excellent standard and that’s why my tenants are with me more than 10 years plus .. I offer very fair rental rates .. a lot lower than market value as a good tenant is invaluable.. it works both ways



Should you not have the capacity to repay the mortgages then? A viable business should have the ability to repay its debts or have a plan in place to liquidate some of the assets to cover debts as they mature. 

If rents do not cover capital, it seems like these are not viable properties?


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## PebbleBeach2020 (8 Feb 2021)

I concur. How do u intend paying for the mortgage at end of term.

In my experience the time to invest in yr property is when tenants are moving out or you are selling it or there's a problem.

It doesn't sound sustainable at all what you are doing to me.


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## George12 (8 Feb 2021)

I have one BTL and one former home mortgage which they know is rented out but are happy to leave that one as it is (a high tracker margin interest and capital mortgage).  There are many people who use their rental portfolio to subsidise their personal expenditure. I do not do this, in fact I am subsidising the properties so it is not fair to generalise! I am relatively young and see these as a pension fund of sorts. I am hopeful that at some stage over the next 25 years they will increase in value and I would be happy to sell one and keep the other so it should pan out. My current home will be paid off in 4 years and at that point I could afford to pay more off the BTL. My difficulty with PTSB is not their request for payment but more their refusal to think outside the box - surely getting half of what they want as an interim measure is better than nothing especially when the property is in negative equity? In term what they wanted it was 75% LTV - basically they wanted the negative equity to be taken care of plus a buffer.


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## Isobel (16 Feb 2021)

Dublinbay12 said:


> Should you not have the capacity to repay the mortgages then? A viable business should have the ability to repay its debts or have a plan in place to liquidate some of the assets to cover debts as they mature.
> 
> If rents do not cover capital, it seems like these are not viable properties?


I have several other assets mortgage free to off load should I need to clear any shortfall.. I don’t see that happening as portfolio is working well .. and in positive equity .. I just want to keep the interest only as long as possible .. we of course have back up plans ..


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## Bayview 2019 (11 Apr 2021)

Your post is really interesting because PTSB would also not allow me to pay off my btl with a little extra years ago I even took a complaint against them that was in 2010 then years later they wanted the capital plus interest which I couldn’t afford now I got a letter from pepper to say my btl tracker was sold by Ptsb to them


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## George12 (12 Apr 2021)

Bayview 2019 said:


> Your post is really interesting because PTSB would also not allow me to pay off my btl with a little extra years ago I even took a complaint against them that was in 2010 then years later they wanted the capital plus interest which I couldn’t afford now I got a letter from pepper to say my btl tracker was sold by Ptsb to them


Hi Bayview. They continue to ignore the fact that I offered to pay capital years ago. I don’t have the appetite to bring a case to the Ombudsman because I spent 8 years fighting a tracker case and it wasn’t an altogether satisfactory experience. They still want no more than 75% of the value of the house to be interest only and it took more than a year for them to accept that the current  interest amount should go down if some capital is being repaid. No mention of being sold to Pepper yet.


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## Glenalua8 (13 Sep 2021)

hanorac said:


> Some advice please.
> I'm after getting a review request from the bank on an interest only BTL mortgage i got many years ago, we are half way through the term approx.
> Firstly i wasn't expecting to get this but they want to offer to move me to capital payments or see what my plan is to pay if off when the time comes,
> I have assets to cover the mortgage but they send me a form to say its our primary residence (we are currently living in the property but plan to rent it out again soon)
> ...


Hi just read your post. I’m in a similar position, I am living in the buy to let property, the property had been rented out but due to a change in family circumstances I am now living in the property. I’ve been asked for valuations of the property or else being moved to capital and interest, which doesn’t suit me currently, I’d wish to remain interest only. How did it work out for you with ptsb, did you disclose you were living in the property and if so what has now happened. Many thanks for your help, v worried about all this.


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## Glenalua8 (13 Sep 2021)

George12 said:


> Hi Bayview. They continue to ignore the fact that I offered to pay capital years ago. I don’t have the appetite to bring a case to the Ombudsman because I spent 8 years fighting a tracker case and it wasn’t an altogether satisfactory experience. They still want no more than 75% of the value of the house to be interest only and it took more than a year for them to accept that the current  interest amount should go down if some capital is being repaid. No mention of being sold to Pepper yet.


Just to add some info, I spoke with ptsb and just to confirm they mentioned their underwriting criteria requires 75% loan to value rate. So if you owe 500k I believe to satisfy their underwriting they would be looking for the property to be worth around 670k (ballpark not great at maths). Would be interested to hear from anyone as to how they are getting on with this whole process. Any info welcome.


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## George12 (13 Sep 2021)

Glenalua8 said:


> Just to add some info, I spoke with ptsb and just to confirm they mentioned their underwriting criteria requires 75% loan to value rate. So if you owe 500k I believe to satisfy their underwriting they would be looking for the property to be worth around 670k (ballpark not great at maths). Would be interested to hear from anyone as to how they are getting on with this whole process. Any info welcome.


My discussions went on for about 18 months in the end and I stayed on interest only during that period. They kept making mistakes with the calculations and months would go by. In the end I got a valuation which showed that the house was still in negative equity. They will only allow me to stay interest only on 75% of the current value which sounds like the same as what they told you. Luckily the house did go up in value over the course of the 18 months so the amount was not as large in the end as it was initially - still it’s costing me about €600 extra a month because the mortgage only has 11 years to run.


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## Glenalua8 (13 Sep 2021)

George12 said:


> My discussions went on for about 18 months in the end and I stayed on interest only during that period. They kept making mistakes with the calculations and months would go by. In the end I got a valuation which showed that the house was still in negative equity. They will only allow me to stay interest only on 75% of the current value which sounds like the same as what they told you. Luckily the house did go up in value over the course of the 18 months so the amount was not as large in the end as it was initially - still it’s costing me about €600 extra a month because the mortgage only has 11 years to run.


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