PTSB - RIP Loan v's Home Loan

Hopefully someone may be able to give us some guidance with the following problem.
We took out a PTSB mortgage in 2006 to purchase a property with a view to carrying out some renovations and ultimately living in it. The mortgage given to us was a RIP Loan - Standard Variable Rate as it was not our family home.

We completed the renovations and moved into the house in Dec 2009. It has been our family home since then. We are making monthly repayments based on the RIP Loan - Standard Variable Rate mortgage currently at 5.9%.

The Home Loan - Standard Variable Rate is currently 4.69% and will be reduced by a further 0.35% in the coming period. We would like to avail of the Home Loan rate but PTSB have advised us that we cannot change the type of mortgage we have ( RIP Loan to Home Loan) as the originating Letter of Offer was for a RIP Loan. Their advice is I can apply to redeem the RIP Loan mortgage and take out a new mortgage which would be a Home Loan mortgage. Unfortunately discussing this with bank personnel their opinion is it is highly unlikey I would get mortgage approval based on the new mortgage lending guidelines and my current salary and borrowing status.

I find this extraordinary given that by facilitating me to switch to a Home Loan from a RIP loan I would be saving circa €450 per month thus making it easier for me to make monthly repayments. Another point is I do not have a Home Loan on my family home.

My question is why can PTSB not change my mortgage from a RIP Loan to a Home Loan ?
Has anyone else experienced this situation? Any help would be much appreciated.

Another point is I do not have a Home Loan on my family home.

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I think a fair solution would be for you to sell your family home and use the proceeds to repay the RIP loan

If there is a balance outstanding, ask to convert that to a home loan.

You were living in a home mortgage free.
You borrowed to buy another property. So it was an investment.
You are now letting out your former family home.
So your mortgage is financing an investment property.

Brendan

Hi Jayo,

If it is of any benefit to you, we were accepted for our 1st and only mortgage in 2005 whilst living in Sydney and this was deemed to be an investment mortgage, which must be a RIP loan.
When we returned to Ireland and moved into the house as was always our intention in 2008, PTSB switched the type of mortgage to a home loan variable. I don't even recall having to fill out any forms to have this done and it was certainly a no-brainer to have it changed.

Hi Brendan, thanks for the response. I should have clarified re what I meant by not having a Home Loan on my family home. What I meant is that the mortgage product I have on my family home is a RIP LOAN and not a HOME LOAN. I now want to change this to have a HOME LOAN on my family home and get the HOME LOAN rate as opposed to what I am currently paying with the RIP LOAN.

Jkrnax said:

Hi Jayo,

PTSB switched the type of mortgage to a home loan variable.

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Hi Jkrnax
Sounds positive and quite similar to our situation. Do you recall getting any correspondence from PTSB at the time?

JC

Hi Jayo,

Yes, I found the correspondence over the weekend. We were on a 5 year fixed rate at the time and the letter confirmed the transfer from an RIP to a home loan.

Jkrnax said:

Hi Jayo,

Yes, I found the correspondence over the weekend. We were on a 5 year fixed rate at the time and the letter confirmed the transfer from an RIP to a home loan.

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Hi J K

If you were on a fixed rate, did you remain on the fixed rate until it expired?

Or did they let you out of the fixed rate as well?

That would seem very generous of them. In fact, suspiciously generous.

Brendan

Hi Brendan,

Yes, we remained on the 5 year fixed rate of 4.29% until it expired in May 2011 and have since been introduced to the svr rollercoaster.

Hi JK
I've had some conversations with banking personnel over the last week to see why I cannot change my mortgage product to a HOME LOAN from our current RIP LOAN and avail of the lower rates. I am making no progress on this and there seems to be a reluctance on the banks part to facilitate any change.
I cannot see the difficulty with two parties agreeing to change the terms of the agreement if both parties are willing.
It appears that in your case there was no issue where both parties agreed to change the status from RIP LOAN to HOME LOAN.
Would it be possible to get a copy of the correspondence you received previously as I need to demonstrate to the bank that this has been done before? I fully understand if you are not in a position to release a copy of the correspondence.

Hi Jayo,

Having taken advice, I would be reluctant to have the details of our switch from an RIP to a home loan brought back to the attention of PTSB as I am now unsure whether or not they made an error at the time.