# Using MARS (not MARP) for problems with Buy to Lets



## 44brendan (31 Jan 2014)

_(I have copied the first three posts copied from  as it's such an important issue and I have not seen it discussed before - Brendan Burgess) _


Please note that AIB as with all banks are required to have a policy on BTL mortgages. This Policy is known as a MARS Policy and normally would not require you to place any property on the market provided that you can pay at least 5% of the total debt on a regular (monthly) schedule. Your post indicates that you have this ability. Rermember this is a minimum affordable amount and if a bank assessment of your circumstances indicates that you have an ability to pay a higher amount, then they are entitled to insist on the higher repayments being maintained. Contact the Bank and request a copy of their MARS policy.


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## homes (31 Jan 2014)

44Brendan , I phoned my bank aout MARS they say MARS is only for three properties anymore than that goes to FSG at bank to make the decision . What do you think of that ?


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## Commercial (1 Feb 2014)

Homes, is the rental income your main source of income?

MARS applies to 3 investment properties, any more investment properties than this and you are deemed a professional investor. If you can't repay the existing loans per the original agreements you are at their mercy to some extent. 
However, you need an income to live off. If that only comes from the houses you may have an argument


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## Brendan Burgess (1 Feb 2014)

Guys

I was aware that the banks had to come with a Mortgage Arrears Resolution Strategy, but I thought that was between the lender and the Central Bank.

Does each lender publish their MARS? 

Can someone with investment properties claim some "rights" under it?

I don't see why the owner of an investment property should have a right to have their cheap tracker rescheduled without penalty.  I would be amazed if the MARS forced the banks to do this.


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## robert 200 (1 Feb 2014)

Hi 44 Brendan , I have a few buy to lets and I am paying 150% interest each month .
I dont understand what 5% of total debt on a regular monthly schedule means . How does my repayment compare?

Many Thanks


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## mrbea (1 Feb 2014)

robert 200 said:


> I have a few buy to lets and I am paying 150% interest each month .
> I dont understand what 5% of total debt on a regular monthly schedule means . How does my repayment compare?



I think paying 5% of total debt - on a regular monthly schedule - means paying 5% of the debt off, over the course of a year.   For example, if debt is 300,000, then 5% of that is 15,000.   It means paying 15k off the capital amount evenly over a year by 12 payments ie € 1250 monthly capital repayment.

 What is the 150% interest each month you mention?


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## robert 200 (1 Feb 2014)

Thanks for that mrbea , in that case i am paying less than 1% off the debt annually - probably not sustainable . My bank ( AIB ) will move in for the kill in about 2 - 3 years when they feel this current appreciation period has stalled .


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## Brendan Burgess (2 Feb 2014)

robert 200 said:


> in that case i am paying less than 1% off the debt annually - probably not sustainable .



Not sustainable for whom? 

If you have buy to lets and you can pay the interest in full, then it is sustainable for you.  You are not losing money and your debt is not rising. 
If the loans are trackers, then it's not sustainable for AIB. If the loans are SVRs then it is very profitable for AIB and they should be happy with the situation. I say "should" but the banks don't realise this. 

However, if you are paying the interest in full, you will be way towards the back of the queue for action by the bank.


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## robert 200 (2 Feb 2014)

Hi Brendan ,

I really hope you are right ( I have spent 40 years putting this portfolio together ). I am on a one month euribor which is close to tracker .

 I recently asked AIB was my loan sustainable - they said a sustainable loan was one where the borrower was making FULL interest and capital repayments . 

I honestly believe the banks are waiting in the long grass and when this current appreciation period stalls in say 2 - 3 years there will be many thousands of BTLs repossessed - including mine!!!


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## homes (2 Feb 2014)

robert 200 said:


> Hi 44 Brendan , I have a few buy to lets and I am paying 150% interest each month .
> I dont understand what 5% of total debt on a regular monthly schedule means . How does my repayment compare?
> 
> Many Thanks


 
Robert 200

Is the 150%  Meaning 100% interst and 50 % of the capital part of the monthly repayment ?


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## Brendan Burgess (2 Feb 2014)

Hi Robert

This is obviously sustainable for you but not sustainable for AIB. If you are not making your repayments, they would be right to tell you to sell it. 

Brendan


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## robert 200 (2 Feb 2014)

hi Homes ,

if you pay 150% interest it means - if you pay 15,000 per month 

10,000 is interest  and  5,000 is paid off the capital


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## robert 200 (2 Feb 2014)

Hi Brendan ,

this latest comment is slightly different from your last : if you have buy to lets .............


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## Bronte (3 Feb 2014)

robert 200 said:


> ( I have spent 40 years putting this portfolio together ). I am on a one month euribor which is close to tracker .


 
If you're 40 years in the property business you must have a lot of equity?  And your mortgages are as good as trackers, so really cheap.  Why then are you in trouble?


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## 44brendan (3 Feb 2014)

Just some clarifications on MARS: There is no one size fits all Banks Policy. Each Bank has it's own policy which was submitted to the Central Bank. The 5% notional payment appears to be common to all banks. However this is a minimum payment!! If Bank assessment is that a client can pay a higher amount they are entitled to demand this amount! I have heard some discussion about a restriction to 3 properties! This is not a standard approach by Banks. While some have distinguished "professional" rather than "amateur" landlords, there is generally flexibility with the Banks' Credit Underwriters on this issue. i.e. Very few Banks will take action against clients if they are "playing ball" and meeting at least a 5% notional rate. The repayment agreements vary from 1 to a maximum of 5 years. In general, Banks are satisfied with a rolling review of performance, provided that the repayment agreements are being sustained and clients are up-front with information provided! 
Be warned that this is an internal policy document and is not as controlled by the CB as MARP. Some banks may take a harder view than others and while this may seem unfair. non-adherenec to MARS procedures is unlikely to be a successful defense in Court if reposession proceedings are commenced!


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## Brendan Burgess (3 Feb 2014)

robert 200 said:


> Hi Brendan ,
> 
> this latest comment is slightly different from your last : if you have buy to lets .............



Sorry, I have no idea what you mean.  Can you spell it out please.

Brendan


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## Springsteen (4 Feb 2014)

Very interesting topic.

How does Mars apply when you also have a family home that is protected under Marp and 3 BTL's?

e.g Where do you stand when all loans are with the same lender and you are negotiating a restructure to make repayments sustainable( i.e to avoid arrears).

S


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## Brendan Burgess (4 Feb 2014)

The Key Point here, is that MARS cannot be claimed by the borrower - it is the relation between the CB and the lender. 

We don't know, for example, what the MARS is for AIB. It can be inferred from deals done by other people.


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## Brendan Burgess (4 Feb 2014)

Guys

Please read the Posting Guidelines

Do not take this thread off topic with your own particular cases. 

Start a new thread. 

Brendan


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## Lone Star (7 Nov 2015)

My bank considered my investment property as under 'MARP' - yes I know it's for residential only - nevertheless they wrote to me saying it was under MARP. Do I have any grounds for going after them for breaches of the CCMA under this - ie them deeming it under MARP and then during that time breaching rules like crazy. I would imagine their letter is an error - nevertheless they did issue it.


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## Asphyxia (7 Nov 2015)

Lone Star said:


> My bank considered my investment property as under 'MARP' - yes I know it's for residential only - nevertheless they wrote to me saying it was under MARP. Do I have any grounds for going after them for breaches of the CCMA under this - ie them deeming it under MARP and then during that time breaching rules like crazy. I would imagine their letter is an error - nevertheless they did issue it.



You are with Danske bank and because this bank has an "all sums charge" as standard in the security of their mortgages, your BTL is secured off your primary residence. Hence you have the protections of the ccma and  marp.

The answer to your question is yes, you can bring these breaches to the courts attention.


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## Lone Star (7 Nov 2015)

Thank you!! You've just made me smile!!!!!!!! RIGHT Danske!!!!! Let's be having ya!!!!!


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