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Can a bank force you to change your mortgage type?

  • 08-11-2010 12:21pm
    #1
    ToxicPaddy
    Moderators, Business & Finance Moderators, Society & Culture Moderators Posts: 9,763 Mod ✭✭✭✭


    A friend of mine bought an apartment and was living in it for nearly 6 years when he was forced to move abroad because of work.

    The apartment is his primary residence in Ireland, he has no other property but due to financial restraints, the cost of paying a mortgage in Ireland and paying rent where he is now living, he had to rent out the property to try and cover some of his costs and help pay his mortgage.

    The bank is now trying to force him to change is mortgage from a fixed rate one for owner occupiers to a buy to let mortgage.. this will cause the interest rate to go from 2.1% to 4.63%.. and as such push his payments way up..

    Are they allowed to do this?

    Tox


Comments

  • #2
    cml387
    Registered Users, Registered Users 2 Posts: 8,644 ✭✭✭cml387


    I would say yes,because the property is no longer his principal private residence,which were the terms of the original mortgage agreement.

    My question would be, how did the bank find out hew was no longer living in the flat?


  • #3
    ToxicPaddy
    Moderators, Business & Finance Moderators, Society & Culture Moderators Posts: 9,763 Mod ✭✭✭✭ToxicPaddy


    I believe there is a clause in the contract that you couldn't live outside the country in the first 10 years, but not 100% sure to be honest, i'll ask him and see what he says..

    And he had to change his type of house insurance as regular insurance doesnt cover renting a property..


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