KBC upped rate when I rented out house

O

OHara

Registered User
Messages
19
Hi All

I bought a house mortgaged through KBC and the payments were E653 per month, APR. 3.44%. In 2009 after abut 5 years paying the mortgage I told them I was renting the property and they said they'd up the interest rate as per agreement, payments are killing me as they're now E890 per month (variable rate and I'm paying over 5.2%) and the rent is only E500. With the interest rate cuts coming up it should be down to E800 but still it jumped up massively when they heard it was rented.

At the time I never questioned it, but now I wonder where they entitled to do this, I have the mortgage agreement in front of me and I can't see any mention that they can do this in the small print so I was going to query it with them.

Any advice or thoughts before I ring them?

Thanks S
 
Were you on a tracker or just a variable rate mortgage?
Most loan agreements say that you lose trackers or you will pay higher rates when it stops being your primary residence. Are you sure there is nothing in the Agreement?
 
I had the same experience with them when I decided to rent out my house last year. I was on a variable rate, and apparently they are well within their rights as the house is now categorised a Residential Investment Mortgage. The irony was I moved out of the house because I was unable to afford the loan repayments on my own anymore. They added an additional c €100 for my trouble!!!
 
ClubMan said:
Because it is a residential investment property.
Click to expand...

Yes indeed.


Clubman said:
I presume you know that you can set 75% of the interest on the mortgage against rental income when doing your (rental income) tax return.

http://www.revenue.ie/en/tax/it/leaflets/it70.html#section4
Click to expand...

I do, but even with that I still have to pay over €500 on top of the rent I'm receiving in order to make sure I keep the mortgage out of arrears. Add to that tax on the 'profit' I have supposedly made. And the various fees such as PRTB and NPPR, and I quickly learned that renting the house was more expensive than just staying in it and persevering.

Which is why I'll soon be moving back into it.
 
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