Does Renting A Property Have A Bearing on Mortgage

squonk

A while back I was offered a job in another part of the country that was significantly better than the positions I was being offered closer to home. The contract was for just over a year so I decided to get my house rented short term and relocate and take up rented accommodation.

Now it looks like my position will be a longer term thing and I like the job so I'm going to stay for the foreseeable future. I'm wondering if the fact that I'm not personally living in the house (but still paying my mortgage as usual) will have any effect on my mortgage?

From my pov I can't really see how it could, as I'm meeting my mortgage payments which is primarily a good thing, and I don't see the property as an investment as I fully envisage returning n due course. There are always things that catch you out so I'm just curious about whether any of this has a bearing on me. I'm on a fixed mortgage for the next 3 years (5 year fixed with BOI).

NIMAN

It will have no effect on your mortgage unless your lender decides that you are breaking the rules of your contract, but you are now technically a landlord and there are a pile of things you must now do.

These include making tax returns each year (as rental income is taxable), registering with the PRTB, stop claiming TRS if you still get it, change your insurance to landlord insurance, maybe telling your bank that you are renting it (if you want to, I wouldn't).

I'm sure I'm leaving out a lot of things.

Check out http://www.irishlandlord.com/
it has a lot of great information for 1st time landlords.
http://www.irishlandlord.com/index.aspx?page=infocentre_article_view&id=34

SugarHigh

If you have a tracker mortgage you might be in breach of your contract.

chris85

SugarHigh wrote: »

If you have a tracker mortgage you might be in breach of your contract.

True also for a variable mortgage. Generally most residential mortgages are given a variable rate based on owner occupied properties. This would be in the terms of the mortgage. if you are renting it could be considered to be on a different variable rate.

Also I would advise to talk to your insurer as the cover may only be for owner occupied properties and thus if anything happens they may not pay out. The insurer will have to tell the mortgage lender should you do this as the lender have vested interested in the property obviously so they would be informed.

squonk

Thanks for the help! I'm currently on a fixed rate. I'll need to change the insurance for sure also. This is a great forum! Thanks guys!

NIMAN

When my PPR turned into a rented property and I changed my insurance from owner-occupied to landlord insurance, the company wrote to me to say they would have to inform the lender.

I thought that would be my tracker gone.

But over a year now and heard nothing.

Bank obviously were not informed, or if they were, couldn't care as long as they are getting paid every month.

digzy

i'd keep shtum if i were you. make sure you declare to revenue though.

chris85

digzy wrote: »

i'd keep shtum if i were you. make sure you declare to revenue though.

The OP will at least have to tell the insurer. Otherwise may not be able to claim in worst case scenario. The insurer are obligation to inform the lender.