Risk of bank moving me to buy-to-let mortgage

[kibby]

I am getting married at the end of the year and plan to move in with my soon-to-be wife. I have two tennants on the rent-a-room scheme but come next year I'm going to get a third in and register with the PTRB, pay tax on my rental income etc.

I read in a thread here recently that in order to deduct mortgage interest from reckonable rental income, I would have to tell my morgtage lender to stop my TRS, but that the lender could then turn around and reassign my mortgage as an investment mortgage and change the terms. My mortgage is a tracker so I really don't want this to happen!

Has this happened to anyone reading this?

 

[WaterSprite]

You tell Revenue to stop TRS. The terms of your mortgage agreement may require you to disclose this to the bank too. I bought a new house this year and rented out my old property. The new mortgage was with the same bank and so they know full well that I'm no longer living in the old property. I notified Revenue to stop TRS on the old property. The bank has not (yet) moved me off my tracker, but they are within their rights to do so per my mortgage agreement. I'm counting each month they keep me on the tracker as a bonus TBH.

 

[Colndas]

It really all depends on the lender that you have your mortgage with, some institutions treat buy to let mortgages very differently to loans on principal private residences.

Make a phone call to your lender and tell them that you are thinking of moving out and ask them to tell you the consequences. As of now you still reside there and it is your PPR so you have nothing to lose by asking them the question.

With regards to when it happens then what you do and how you do it may affect the terms on your mortgage and whilst most lenders up to now have not switched rates on people who have moved out of their previous ppr they may do so now given that margins are so tight for them.

You don't have to shout it from the rooftops and whilst in theory you must get permission from the bank before you let it out, in practice that rarely if ever happens.

In addition they are unlikely to rescind the whole mortgage agreement if you fail to honour that part of it. The TRS and insurance obligations can easily be changed without going near the lender and with regards to your tax affairs as far as revenue are concerned as long as you register with the prtb they dont care what type of a mortgage it is, so long as you only claim interest on the loan that was used to buy the property.