Tracker Rate - Will my sister lose it now that she has rented out?

Compudaro

Here's the situation,

My sis just moved out of her house (on which she has a tracker) and has rented another house (to be closer to work). She has rented out the house she owns, informed Revenue and cancelled the TRS on her mortgage. Problem is, she told me she missed a call from her bank branch on Friday and is obviously concerned it is an attempt to get her off the tracker and onto an investment rate. I'm no expert (although she thinks I am!) - hence this post looking for opinions on the situation please. She's read over her original mortgage terms and conditions and they make no reference to either:

1. a requirement for her to live in the house
2. any change to the tracker rate if she moves out

Thanks

BBMcQ

I know alot of people who are mortgage to the nines and have no choice but to rent out their mortgages house/apartment. I think it's totally above board.

Compudaro

Hi Stuart, do you think she'll lose it though? I don't know why else the bank would be phoning her but maybe I'm Overthinking it!

BBMcQ

Not to sound smart, but the only way to find out is to pick up the phone and call them back! They could just be calling for a survey or to discuss if she can afford her current payments.

3DataModem

They probably just want her new address!

Seriously.. there's a lot of talk about this happening to people. I have discussed this with a lot of people... and I've posted on boards asking if anyone actually knows anyone who this has happened to.

Result: nobody nowhere actually knows anyone who this has happened to.

Didn't happen to me either of the two times I've done it.

Just call the bank.

Pkiernan

If the bank find out, then unfortunately they may be entitled to move her away from the tracker loan.

However, they won't be calling her to find this out, they would be sending a letter of intent to cancel her tracker.

If I was her, I wouldn't be calling the bank back.

Compudaro

Thanks for all the comments/advice. She can't afford (literally!) to lose the tracker so I think keeping the head down is the best way forward.

amacca

Pkiernan wrote: »

If the bank find out, then unfortunately they may be entitled to move her away from the tracker loan.

However, they won't be calling her to find this out, they would be sending a letter of intent to cancel her tracker.

If I was her, I wouldn't be calling the bank back.

Just curious for my own information...on what grounds could a bank cancel a tracker rate if there is no stipulation/mention of a requirement to live in the property for the entire duration of the mortgage

could they claim it was meant to be a residential mortgage but she could be using it as an investment property by renting it out?

could she be able to argue the point that it was not for profit making reasons she chose to move out

@op: has your sister read the entire contract in full? seems like she has from your post but just wondering if you are sure there is absolutely no mention of a requirement for her to live in house for a certain period

Paulw

amacca wrote: »

could they claim it was meant to be a residential mortgage but she could be using it as an investment property by renting it out?

could she be able to argue the point that it was not for profit making reasons she chose to move out

Yes, that's generally the claim they make.

Profit doesn't matter. Just the fact that it is no longer her residence, and she has rented it out.