Bank claiming they didn't know house was rented

L

Lucuma

Registered User
Messages
127
I have a mortgage of 140,000 at 4.5% with 20 years remaining with PTSB. I am an accidental landlord and have the house rented out for the last 8 years. Because I bought in 2005 I should still be entitled to TRS but that was stopped when I started to let the house out and the annual interest certificate the bank sends me clearly shows TRS = 0.
I also changed the house insurance at the time to reflect the fact that the house is now rented out and that has remained the case every year when I renew.
Every year my accountant does a tax return for me of my rental income and I pay tax on it.

My loan to value is now around 60% so I want to apply for a lower interest rate. I contacted the bank about applying for a new interest rate of 3.9% based on LTV of 60% and I also asked them to change my postal address to my new address as it was annoying having to collect the letters from the tenant (although this wasn't frequent). I have now received a letter from the bank asking if my change of address means the property is no longer residential and is now a buy to let meaning the interest rate will be affected!

I did not actually realise that changing from PPR to rental affected the interest rate? Do you think this will scupper my chances of changing from 4.5% to a lower rate based on my LTV?
 
Lucuma said:
Do you think this will scupper my chances of changing from 4.5% to a lower rate based on my LTV?
Click to expand...
Yes. 100% certain.
Edit: this is based on the question can you switch to MVR rate. Several 'untruths' need to be told to switch.
Whether the bank can change you from your SVR to a BTL rate is a separate question, and based on contract. For example PTSB have not been removing trackers in such cases as they've no contractual basis.

As to the thread title: How would the bank know unless you told them? They don't see your tax returns, or your house insurance? There are several reasons that TRS could have stopped. That's up to you to sort out - all the bank does is tell Revenue how much interest you paid, and process a payment for them if your account is on a list Revenue provide.
 
Last edited:
Lucuma said:
I have now received a letter from the bank asking if my change of address means the property is no longer residential and is now a buy to let meaning the interest rate will be affected!

I did not actually realise that changing from PPR to rental affected the interest rate? Do you think this will scupper my chances of changing from 4.5% to a lower rate based on my LTV?
Click to expand...

OP, I did reply to this but the mods deleted the response thinking I was de-faming Onion. That persons post simultaneously arrived when I was replying to you.

I say the part in bold and underlined is rubbish, they cannot do that. I also have a mortgage with PTSB from 2003 which was for a PPR. We informed Revenue that the house was being rented and to drop the TRS, that was done. The fixed rate came to an end in 2013 and we approached PTSB for a payment holiday thinking it would revert to a BTL rate as customer service had indicated. The manager of that branch simply looked at the letter of mortgage and indicated as it was a PPR mortgage it would drop to the PPR rate.

So please check your letter of mortgage, if it says PPR mortgage then challenge the view of PTSB. My house is still rented and I pay the PPR rate not the BTL rate. I also availed of the <50% PPR rate reduction recently.

Sorry Onion but that is the case with PTSB that I have personal experience of
 
Sounds more likely the guy in the Bank was not paying attention, you should have been moved to buy to let rate, it is not your PPR, that is why they have these rates after all, what happened in your situation it is not unusual but also is not the norm either, that said...good for you.
 
RedOnion said:
So, you switched to their MVR <50% rate, although house was already rented?
Click to expand...

Yes, PTSB wanted the house revalued and the tenants facilitated that. The Surveyor was cynical about it though, he had rentals of his own! He was the only bug bear costing us a delay and one month reduction.
 
Palerider said:
Sounds more likely the guy in the Bank was not paying attention, you should have been moved to buy to let rate, it is not your PPR, that is why they have these rates after all, what happened in your situation it is not unusual but also is not the norm either, that said...good for you.
Click to expand...

Don't think they can change the legal letter of mortgage, that is what we were told. It is what it is. they may well have a clause now in mortgage contracts but having to rent a house because of necessity should not penalise the mortgage holder.
 
Nordkapp said:
The Surveyor was cynical about it though, he had rentals of his own! He was the only bug bear
Click to expand...
Now my turn to say sorry. I don't follow?

Why would the valuer care? It's a standard valuation form regardless. Did he delay because he was ticking a box to say the house wasn't rented?

Nordkapp said:
to rent a house because of necessity should not penalise the mortgage holder
Click to expand...
Re necessity, yes there are some provisions in CCMA that could prevent them from changing the rate, but they would only apply where it's the only residential property that you own in the state.

Nordkapp said:
Don't think they can change the legal letter of mortgage, that is what we were told. It is what it is
Click to expand...
Failing all else, most banks have a clause that would allow them to make the mortgage repayable on demand if it's no longer your PPR. Could well be shoddy paperwork with PTSB.
However if they've already indicated to the OP that changing their address will change the rate, they must at least believe they've the right to do so, and a process to do it.
 
Lucuma said:
I did not actually realise that changing from PPR to rental affected the interest rate? Do you think this will scupper my chances of changing from 4.5% to a lower rate based on my LTV?
Click to expand...

It can do. But it depends on your original contract. It's clear from your post the PTSB believed it was your PPR and not a BTL. I've had PPR loans on BTL's. Many moons not so long ago there was no such thing as a BTL mortgage.
 
RedOnion said:
Why would the valuer care? It's a standard valuation form regardless. Did he delay because he was ticking a box to say the house wasn't rented?
Click to expand...

I had a PPR revalued once to avail of a better LTV. The bank chose the valuer, I paid the bill.

It's pretty obvious to a valuer if a house is rented or not. The valuer relies on repeat business from the bank.

They may be reluctant/unwilling to sign off on a PPR valuation that clearly isn't.
 
So, to summarise for the OP, if I have this correct?

The bank might have a contractual right to change rate from PPR to BTL once house is rented.

If they do have the right, they'll use it once they're aware property is rented, except in specific circumstances (PTSB have previously commented on cases where circumstances force owner to leave home, but they haven't purchased another PPR).

Unless OP is absolutely certain that the bank does not have the right to remove PPR, they should do nothing.

Bank would become aware through OP telling them directly, changing correspondence address, or getting MVR valuation report which has a checkbox to say if property is owner occupied or rented.
 
RedOnion said:
Now my turn to say sorry. I don't follow?

Why would the valuer care? It's a standard valuation form regardless. Did he delay because he was ticking a box to say the house wasn't rented?
Click to expand...
I had used said valuer before, the Bank picked him but he was a pure messer. Sent back to me a valuation with the wrong address for starters so when I chased him he verbally said I shouldn't be entitled to the drop in interest rate as the house is rented. The bank was fully aware and the entitlement was there. I did formally complain to PTSB about the guy. Hope he had a fun time selling his apartments, pure wheeler dealer, country is unfortunately full of them.
 
Nordkapp said:
OP, I did reply to this but the mods deleted the response thinking I was de-faming Onion. That persons post simultaneously arrived when I was replying to you.

I say the part in bold and underlined is rubbish, they cannot do that. I also have a mortgage with PTSB from 2003 which was for a PPR. We informed Revenue that the house was being rented and to drop the TRS, that was done. The fixed rate came to an end in 2013 and we approached PTSB for a payment holiday thinking it would revert to a BTL rate as customer service had indicated. The manager of that branch simply looked at the letter of mortgage and indicated as it was a PPR mortgage it would drop to the PPR rate.

So please check your letter of mortgage, if it says PPR mortgage then challenge the view of PTSB. My house is still rented and I pay the PPR rate not the BTL rate. I also availed of the <50% PPR rate reduction recently.

Sorry Onion but that is the case with PTSB that I have personal experience of
Click to expand...
Very helpful. I found the letter of approval for the mortgage. It doesn't say either way if it's PPR or not
 
RedOnion said:
So, to summarise for the OP, if I have this correct?

The bank might have a contractual right to change rate from PPR to BTL once house is rented.

If they do have the right, they'll use it once they're aware property is rented, except in specific circumstances (PTSB have previously commented on cases where circumstances force owner to leave home, but they haven't purchased another PPR).

Unless OP is absolutely certain that the bank does not have the right to remove PPR, they should do nothing.

Bank would become aware through OP telling them directly, changing correspondence address, or getting MVR valuation report which has a checkbox to say if property is owner occupied or rented.
Click to expand...
Thanks.
Any ideas how I could 'be absolutely certain that the bank does not have the right to remove the PPR'. How can I find this out? Contact the original solicitor we used when we bought the house (2005)? I don't even know if he would have kept records from that far back.
 
Lucuma said:
Thanks.
Any ideas how I could 'be absolutely certain that the bank does not have the right to remove the PPR'. How can I find this out? Contact the original solicitor we used when we bought the house (2005)? I don't even know if he would have kept records from that far back.
Click to expand...
There must be something in the letter of mortgage. Mine says residential loan. Even got a new letter offering 3.2% fixed rate for 5yrs which I may take up
 
It says 'Loan Type - 1 year fixed rate home loan' (we were fixed initially)
On the letter offering 3.2% fixed rate I got the same letter. I don't trust PTSB!! Read the fine print it clearly states that when you come off the fixed rate you'll be put on the available variable rate and it could be higher or lower than what you are on now. They did this to me before, when I came off fixed I was put on a higher variable rate than the SVR. At one stage I was on 6.15% until the banks were nationalised after the crash and the government were running PTSB and then magically I was brought down to the SVR. If you're already on a MVR based on your LTV I'd think very carefully before coming off it
 
Lucuma said:
Thanks.
Any ideas how I could 'be absolutely certain that the bank does not have the right to remove the PPR'. How can I find this out?
Click to expand...
Unfortunately I'm not familiar with the PTSB terms and conditions, but I know they weren't very robust historically. You need to find out exactly which condition now allows them to change from PDH to BTL rate, and then check that this condition definitely isn't in your contract.

Personally, I don't believe that you can just rely on the fact that the loan offer / product was for a PDH as others have suggested.
 
You must log in or register to reply here.
Back
Top