Bank demanding that I change mortgage

eam77 · 13-07-2020 07:37PM #1

I have a property that I have a mortgage on and we recently decided to rent it out. Our mortgage lender is saying we have to change from residential mortgage to a buy to let mortgage.
Is it technically applying for a new mortgage?
Are we going to be better off or worse off by changing?
Or if we ignore them and carry on repaying the residential mortgage, will they chase us to change anyway?
Any help will be appreciated. Thanks

awec · 13-07-2020 07:59PM

The bank knows you're letting it out so you won't get away with not changing, I am pretty sure you'd be considered in breach of your original mortgage contract at this stage.

You'll be worse off as interest rates on BTL are a lot higher, around the 5% mark.

JustAThought · 13-07-2020 08:05PM

How did your bank know you are letting it out?

Of course if you decide not to let it out, will they continue to demand that you change mortgage product?

Best advice I got before I was lucky enoug to be able to take out a mortgage was never to have my active ‘money’ account with the same bank as my mortgage as it would allow them to see everything that was going on financially in my life. It was extremely good advice, whomever told me did me a huge favour.

awec · 13-07-2020 08:08PM

JustAThought wrote: »

How did your bank know you are letting it out?

Of course if you decide not to let it out, will they continue to demand that you change mortgage product?

Best advice I got before I was lucky enoug to be able to take out a mortgage was never to have my active ‘money’ account with the same bank as my mortgage as it would allow them to see everything that was going on financially in my life. It was extremely good advice, whomever told me did me a huge favour.

It was fairly nonsense advice, it's one of those old wives tales things.

Your bank can't just open your accounts and browse through your transactions as it pleases.

JPA · 13-07-2020 08:10PM

awec wrote: »

It was fairly nonsense advice, it's one of those old wives tales things.

Your bank can't just open your accounts and browse through your transactions as it pleases.

They can request 6 months bank statements though.

XsApollo · 13-07-2020 08:11PM

I presume the insurances are void also if you are letting instead of living in it?

awec · 13-07-2020 08:12PM

JPA wrote: »

They can request 6 months bank statements though.

When applying for a mortgage? Of course? They have to request it though, and even your own bank will need your permission to look at your accounts that you hold with them.

Synode · 13-07-2020 08:13PM

How did the bank find out you're letting it

Witcher · 13-07-2020 08:15PM

awec wrote: »

When applying for a mortgage? Of course? They have to request it though, and even your own bank will need your permission to look at your accounts that you hold with them.

That's completely incorrect.

awec · 13-07-2020 08:16PM

Witcher wrote: »

That's completely incorrect.

What part?

You think Joe Bloggs in the bank can open up Witcher's accounts whenever he wants and see what you're spending your money on?

eam77 · 13-07-2020 08:16PM

Synode wrote: »

How did the bank find out you're letting it

Let it slip when asking for a payment break...

Synode · 13-07-2020 08:17PM

Yeah you're goosed then

Witcher · 13-07-2020 08:17PM

awec wrote: »

What part?

You think Joe Bloggs in the bank can open up Witcher's accounts whenever he wants and see what you're spending your money on?

Yes and I know this because I worked in banking.

There is no mechanism to 'request permission' to access an account, all I can say to that fanciful notion is LoL.

awec · 13-07-2020 08:18PM

Witcher wrote: »

Yes and I know this because I worked in banking.

There is no mechanism to 'request permission' to access an account, all I can say to that is LoL

So you just opened whatever account you wanted, whenever you wanted?

Witcher · 13-07-2020 08:19PM

awec wrote: »

So you just opened whatever account you wanted, whenever you wanted?

You could if you wanted to.

awec · 13-07-2020 08:19PM

Witcher wrote: »

You could if you wanted to.

Without repercussion or consequence? All above board and legit to do so?

Witcher · 13-07-2020 08:22PM

awec wrote: »

Without repercussion or consequence? All above board and legit to do so?

Why would there be consequences? It's part of the business function

You'd be looking up hundreds of accounts a day...that's part of what banks do..there's no pie in the sky 'permission' systems, nobody who works in a bank gives two sh1ts about searching up accounts but it could be done.

awec · 13-07-2020 08:26PM

Witcher wrote: »

Why would there be consequences? It's part of the business function

You'd be looking up hundreds of accounts a day...that's part of what banks do..there's no pie in the sky 'permission' systems, nobody who works in a bank gives two sh1ts about searching up accounts but it could be done.

Randomly? Surely you are looking up the accounts of people who apply for mortgages, loans or credit, perhaps have made unusually large cash deposits, or have some other reasonable reason for needing to access their account?

I mean, you are suggesting here that you could randomly look up the account of anyone you wanted, at any time, look at their income, look at what they spend their money on, for no reason whatsoever other than idle curiosity, and you could do this openly and without any consequence?

Witcher · 13-07-2020 08:27PM

awec wrote: »

Randomly? Surely you are looking up the accounts of people who apply for mortgages, or have some other legitimate reason where looking through accounts is part of the process?

I mean, you are suggesting here that you could randomly look up the account of anyone you wanted, at any time, look at their income, look at what they spend their money on, for no reason whatsoever other than idle curiosity, and you could do this openly and without any consequence?

Yes, you could.

awec · 13-07-2020 08:29PM

Witcher wrote: »

Yes, you could.

That is interesting. Do banks employ many people to randomly go through accounts for no reason whatsoever?

guyfawkes5 · 13-07-2020 08:34PM

Regarding OP:

You agreed to have the property as your primary residence in your mortgage contract so the bank are well within their rights to move you onto a BTL rate.

Depending on the size of your mortgage, this could end up costing you 100s of Euros every month.

If I were you, I would immediately contact the bank to see if there's some way you could stay on your current rate such as cancelling your rental plans and moving back in.

Alrigghtythen · 13-07-2020 08:35PM

XsApollo wrote: »

I presume the insurances are void also if you are letting instead of living in it?

Yes it will be

BoyLaw937 · 13-07-2020 08:35PM

awec wrote: »

What part?

You think Joe Bloggs in the bank can open up Witcher's accounts whenever he wants and see what you're spending your money on?

They can.

Source: I did

LawBoy2018 · 13-07-2020 08:36PM

.

awec · 13-07-2020 08:39PM

BoyLaw937 wrote: »

They can.

Source: I did

Fair enough, I stand corrected.

It seems mad in this privacy crazy world that random bank employees are allowed/encouraged to browse random accounts without reason or cause.

guyfawkes5 · 13-07-2020 08:39PM

awec wrote: »

That is interesting. Do banks employ many people to randomly go through accounts for no reason whatsoever?

From having worked at a fintech R&D department, security like this is accomplished by automation - from arbitrary transfer rules like transactions above a certain amount or transfers from networks with a history of fraud, to AI-driven stuff in the more cutting edge startups.

Having people spot check accounts, even at random, wouldn't be scalable and I suspect not strictly legal.

*Edit: seems the conversation is more about checking accounts in a targeted fashion and not at scale. The above is the larger scale security.

TuringBot47 · 13-07-2020 08:41PM

eam77 wrote: »

I have a property that I have a mortgage on and we recently decided to rent it out. Our mortgage lender is saying we have to change from residential mortgage to a buy to let mortgage.

Are we going to be better off or worse off by changing?

Worse off, different rates.

Also, if you still get mortgage interest relief at source then that will be immediately stopped.

Landlords claim interest relief to offset their tax bill, when they legally declare the rental income.

awec · 13-07-2020 08:45PM

guyfawkes5 wrote: »

From having worked at a fintech R&D department, security like this is accomplished by automation - from arbitrary transfer rules like transactions above a certain amount or transfers from networks with a history of fraud, to AI-driven stuff in the more cutting edge startups.

Having people spot check accounts, even at random, wouldn't be scalable and I suspect not strictly legal.

*Edit: seems the conversation is more about checking accounts in a targeted fashion and not at scale. The above is the larger scale security.

This is what I suspected too, but it appears from this thread that bank employees can look through your account at any time for no reason at all and that there are no policies or procedures against this.

I was aware of the automated flags that can happen for certain transactions, but not this.

Truth be told, I am still somewhat skeptical.

tvjunki · 13-07-2020 08:45PM

I think I while back the Banks looked at their mortgage book to see what was BTL to see what they could sell off. They also checked what was home mortgage that changed to btl. They just had to go to rtb to find out what properties were registered to be rented out. They could also do a register search and see if you had another property you had a mortgage on.

Check your mortgage contract. Some got a mortgage that were not restricted to home owners only. If you have a lovely tracker they can in some cases request you move to higher btl mortgage.

You can move back in and let them know if is your principal private residence. If you rang them to say you are moving out then all you can do is reverse your decision and the house you have bought rent that out. Work out what is better financially for you.

LawBoy2018 · 13-07-2020 08:46PM

awec wrote: »

This is what I suspected too, but it appears from this thread that bank employees can look through your account for no reason at all and that there are no policies against this.

Why would it be illegal?

Renjit · 13-07-2020 08:47PM

awec wrote: »

This is what I suspected too, but it appears from this thread that bank employees can look through your account at any time for no reason at all and that there are no policies or procedures against this.

Those with access and authorizations can look at the data. Of course, it may be logged and audited later.

Bank demanding that I change mortgage

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