Stuck with Pepper?! (Abroad Landlord)

[vonkoda]

To make this super simple:
- two properties with ex, one purchases year 2000 and other 2008 (lol yes, still not quite back to that cost))
- split in 2012, mortgages moved to Pepper sometime after from Perm TSB. Both myself and partner move abroad (separately).
- Rented properties, kept rent reasonable and have long term tenants. Kept to the 4/2% increases as both in RPZ.
- Rent is now about EUR500 (property b) and EUR1000 (property a) under market rate as it wasnt possible to increase with market or now Interest Rate increases thanks to RPZ caps and generally not being an asshole landlord..
- As of latest interest rate increases, mortgages are now higher than rent (and not slightly). Peppers rates are above market and recommend customers shop around..

- Rang Perm TSB to see if I could switch mortgages to them, they said yes in theory but with two major problems:
- I need to be paid in Euro, which means I need to move to Ireland/Eurozone. This isnt possible currently.
- Mortgage providers no longer count rent as income, at all, in any percentage. Which completely snooker me with these properties again.

Thanks to the RPZ cap, I have no real hope of getting rent to the level required to maintain mortgages (let alone all the other expenses). And it appears I cannot move the mortgages at all anyhow?

Has the market in Ireland really created this situation where Im forced into insolvancy or have to evict tenants to sell (at a loss)?? This cannot be widespread as surely it would collapse the market?
Are both lines in bold true for all providers, as TSB claimed?

 

[RedOnion]

What interest rate are you currently paying?
Did you explain to PTSB that you were looking for buy to let mortgages?
Are the properties in positive equity?

In terms of the statements, generally banks will only lend to non residents where the rent is 1.2 times a stressed mortgage repayment. If you don't pay, they can appoint a rent receiver and get thd rent directly.

The foreign currency income constraint was brought about by the mortgage credit directive in 2016. The last time I looked at this scenario AIB were the only lender that would accommodate it.

 

[vonkoda]

3.6% and 6.5%
Yes, told PTSB the complete situation.
Positive equity, different per house:
- Mortgage on property a is EUR164k vs valuation of EUR380k.
- Mortgage on property b is EUR364k vs valuation of EUR375k (!, bought for EUR400k in 2008).

On the 1.2 times rent the stressed mortgage repayment.. as above that's not what PRSB said, they said no one will count rent at all, ever? Regardless.. whats counted as Rent? Due to my parents (acting as letting agent) accidental generosity they signed up / rolled tenants current contracts with the minimal increase for years, putting them way out of whack with market rates and mortgage repayment costs. I cannot see how to change the rent without finding new tenants and these two groups are sitting on the best value rents in the country so cannot imagine either would leave, ever.

In Euro values:
Property A Rent: €1870 vs Mortgage €2033.74 vs Market Rate: €2650-2800
Property B Rent €1500 vs Mortgage €1662.56 vs Market Rate: €1750 to €2000


On foreign income constraint.. AIB would (did) accommodate not having Euro salary?

 

[RedOnion]

On foreign income constraint.. AIB would (did) accommodate not having Euro salary?

Yes. The legislation requires that a lender can only enter such a mortgage if they can also offer you FX hedging. You don't have to use it, but they have to be able to offer it. To the best of my knowledge BOI withdrew from that niche 2 or 3 years ago, leaving just AIB.

Regardless.. whats counted as Rent?

As the property is rented, the actual rent received. They're both in RPZ, so you're tied to that, even if you get new tenants.

3.6% must be a former PPR? Buy to let rates are higher, and you'd be looking at around 5% to switch.

On the 2nd property, nobody will lend at 97% loan to value. And banks don't like cross charging anymore.