Renting of house with owner occupier mortgage

ianc4000

Would love some help on this question about renting out a home when my original mortgage is an owner occupier mortgage rate.

Cant find any information on this on threads or on the net

Scenario: 

homeowner buys a property in dublin to live in, gets an owner occupier fixed mortgage at the time but 6 months later gets offer of job abroad and moves abroad, and rents property. Mortgage remains unchanged (owner occupier mortgage)

1. When the banks who provides the mortgage are informed that the house is now rented will they increase the interest rate as it is not owner occupied. If so will the increase be for the time it is rented out or the full term?

2. When the rental accounts are submitted to revenue will revenue then inform the banks who provided the mortgage that the house is now not owner occupied but is rented?

JVince

The bank won't really care.

Revenue have no communication with the bank.

In reality just make sure the insurance is changed to a rental

Former Former Former

I would say in the vast majority of cases, people do not tell their bank that their circumstances have changed. Why would you?

Revenue won’t tell the bank either, makes no odds to them as long as your taxes are in order. This assumes you didn’t get some sort of first time buyer relief, but even then it’s between you and them, not the bank.

Peregrinus

Revenu will tell the lender nothing about your personal tax affairs.

You have to tell your house insurer of the changed situation. The lender's interest in the property is noted on the house insurance policy. I don't know, though, whether this means that the insurer may tell the lender of the position.

I also don't know whether it's the practice of lenders to increase the mortgage interest rate when a property is rented out in these circumstances, but I suspect that it is not.

Princess Calla

There's a bit of a grey area/loophole here.

I presume you are renting abroad, so the Irish property is still your private principal residence on Irish soil.

The banks won't change your interest rate in this case.

However if you bought a second property in Ireland and living in it full time, that would be your ppr and the interest rate would change on first house.

That's my understanding anyway!

Again make sure you are covered with landlord insurance.

Also from a tax point of view if you are abroad and earning rental income from an Irish property, it is subject to, as far as I can remember, withholding tax I think that's at 20% so that's something you should look into.