Owner Occupier looking to rent out apartment - any effect on mortgage?

D

daithi200

Guest
Hi,

My wife and I are Owner Occupiers of an apartment, and we have a tracker mortgage with EBS. The apartment is in negative equity.

We have some money in savings and are thinking of buying a family home and renting out the apartment. We would be looking to get a mortgage from a different bank and not EBS.

In the General T&C's on the tracker mortgage the only mention about Tenancy is the following
"The borrower must personally occupy the property on completion of the home loan, unless EBS has been informed of and has given it's consent to alternative arrangements"

Does this mean that if I inform EBS that we are renting out the apartment that I am breaking the T&C's and in worst case scenario EBS could force me out of the tracker mortgage?

Do I have to tell EBS that the apartment is no longer my PPR and that I'm renting it out?

Thanks for the help,
Daithi
 
The wording is a bit odd .."..on completion of the home loan...". What does that mean I wonder ? It does appear ,despite the odd wording that ESB want to know. And my advice is tell them nothing because banks are really trying hard to get people off trackers and will use any excuse. Don't even change your address for ESB mailing purposes.
This may not be correct advice ,of course, and I'm only giving it because I think banks are scum.

Mind you , have you consider al the pros and cons of letting your apt ? Whilst many apts can give a good return at present ,unless you know the letting business it ain't that easy - and the govnt is making it tougher each year for landlords.

If you want more space why not sell the apt ,making up the shortfall with your savings, and rent a house for a while ?
 
Hi oldnick,

I'm not sure either what .on completion of the home loan..means.

I assume that it has to mean when I drew down the mortgage and at that time the apartment was my PPR so i met the T&C.

Now 6 years later i want to rent out the apartment. The is nothing in the T&C telling me that i have to inform EBS.

Rgds
Daithi
 
Hi Daithi

How did you get on with this? Did you need to notify EBS when you moved out? Did they have any come-back?

I'm in a similar situation. I am currently and owner occupier, but I will be moving abroad shortly and I want to rent out my apartment while I'm gone.

I called EBS today, they told me that I need to switch to a buy-to-let mortgage. Doing that would mean that I lose my tracker rate and and my repayments would go up by 400euros per month. He didn't consult my loan documents to tell me this.

I would love to hear your story or get advice from anyone else who has been in this situation...
 
daithi200 said:
Hi,


In the General T&C's on the tracker mortgage the only mention about Tenancy is the following
"The borrower must personally occupy the property on completion of the home loan, unless EBS has been informed of and has given it's consent to alternative arrangements"
Click to expand...

I would interpret that as you must personally occupy the property for the duration of the mortgage unless you negotiate something with them.
 
There is a detailed informative "key thread" on this subject in the mortgages thread.

Opinions and experiences vary.

But my advice to anyone on a trackr wishing to let their property would be to say NOTHING to the bank, and don't tell the bank about any change of address (use as much as possible any internet use rather than post -something banks want customers to do).

Look at raggmop's post no 5 as a warning at what it would cost someone -five thousand euros per year on an apartment !
 
I've recently done this with the EBS and even told them in the end. They didn't change the rate but I was on a varible rate so maybe there was no difference in the rates.

All I could find on there website was fixed rates for Buy to let mortagages. They didn't seem to bother either way to be honest.

House wasn't in negative equity either and didn't take the new mortagage out with them.
 
Expecting word on a similar situation from Ombudsman in the next few weeks, but from research/experience, it seems to all come down to T&C wording, or basic contract law - either it's in there and they can enforce it, or it's not and they can't. In my inexpert opinion, based on your quoted wording, I'd be worried that you'd be in breach of contract if you let the property without letting them know.
 
Hi Just a quick question on this, would the wording on the T&C be contained in the Mortgage Loan offer, or does it need be the signed Mortgage Loan agreement? I have the mortgage loan offer back up, but cant see anything in it, maybe need the signed mortgage loan agreement to see it?
 
I'd be interested how you got on with this too Daithi. My partner in similar situation wants to let out apartment and move in with me.

I approached EBS about it and the woman in there was basically saying 'Read between the lines and don't tell us that you are going to rent because if you do you will lose tracker.''

We haven't checked the wording but I assume they're all similar.
 
EBS seem to be pushing this "don't ask, don't tell" approach pretty enthusiastically - ask yourself why? I wouldn't have much faith in any of the lending institutions looking out for the interests of their customers, I think we've seen enough to suggest they're only looking out for themselves. When a bank is telling you (admittedly in not so many words) to breach the terms of your contract, you have to ask why they would do that, and who might benefit most?
 
PortoBoy said:
. When a bank is telling you (admittedly in not so many words) to breach the terms of your contract, you have to ask why they would do that, and who might benefit most?
Click to expand...


The bank will benefit as the customer would likely not be able to pay a higher interest rate. No point in pushing people over the edge. It also benefits the borrower.
 
I'd like to think it was that simple and benevolent, but I fear it's not. If you follow their encouragement to breach T&Cs of loan, then all bets are off on that contract, and any protections for the borrower it may have contained. Implications of that could be huge, with massive unintended consequences for the borrower down the line- if the customer chooses to walk away from that contract, what's to stop a bank imposing new punitive T&Cs whenever they like?
 
In my case Im in arrears already so its a bit different, and I have annoyed EBS no end, but just to add that when I told them that Im renting it out in order to make mortgage payments possible, the person I dealt with was very snappy and told me that in no uncertain terms I had to reapply for a "Buy to let" mortgage (Ive had my tracker mortgage since 2005) and before doing so I had to clear all outstanding arrears on the account.

But yes, the EBS guy was insistent on changing the terms of the mortgage after I told them.
 
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