Can bank only offer me buy to let fixed rate on an existing mortgage ?

radar0976 · 01-11-2022 06:40PM #1

I'm looking at fixing our mortgage. Currently on 3.75% variable, but obviously that's not going to last :)

The property was originally bought about 15 years ago by my wife who lived in it. However it has been rented for the last 10 years since we built our own house. The bank won't offer me "Existing Business" fixed rates of 3.00% but only "Buy to Let" fixed rates of 4.85%.

Can the bank legally do this ? After all we are not "buying to rent" we are just looking to switch a rate on a property which is now rented but wasn't originally bought as a rental. ?

cython · 02-11-2022 10:15AM

This is normal enough. You'll likely find that there's a clause in both the existing business terms, and indeed the current loan contract, that states it's only valid as long as the borrower uses it as their PPR which is obviously not the case if you're renting it out. You may well even be in breach of the terms and conditions of the current 3.75% variable rate by renting it if this is the original loan that your wife used to buy it as her PPR.

Jim2007 · 02-11-2022 01:40PM

https://www.boards.ie/discussion/2058270004/can-bank-only-offer-me-buy-to-let-fixed-rate-on-an-existing-mortgage

Just like any other business banks are not obliged to do business with you. And just like you can't buy a generic car, you can't get a generic mortgage, you buy a particular product in both cases. And just like car dealers being unwilling put new features on an old model for free, banks are unwilling to bolt new features to a financial product.

The bottom line is that you are seeking to finance a 'buy to let' and that is the product they offer in that market. But like everything else you are free to shop around, have you considered moving to a different bank?

walterking · 03-11-2022 04:36PM

legally they could have moved you to Buy to Let rates when you changed it to a rental. But they tended not to do that.

the chances are you don't have a massive balance, so rate changes won't be too onerous on you and the interest is deductible from the rent giving you a further cushion on rate increases

Can bank only offer me buy to let fixed rate on an existing mortgage ?

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