GOT A TRACKER MORTGAGE?
READ THROUGH YOUR CONTRACT BEFORE RENTING OUT YOUR HOUSE
Tracker mortgages are estimated to have cost Irish banks several hundreds of millions of euros and, to recover some of this money, the banks have been forced to raise the cost of variable interest mortgages.
Over half of Irish residential mortgages are tracker mortgages, where the rate of interest is usually around
1 % higher than the European Central Bank rate. This means that borrowers can end up paying a current interest rate of 1.6 %, compared to a standard
variable rate of between 3 % - 5.5 % or higher.
If you were lucky enough to buy your house on a tracker
mortgage basis, and are currently renting it out, so it is no
longer your principal residence, you may shortly receive
a letter from your bank telling you that you may be
switched from the cheaper tracker mortgage rate to a
standard variable rate.
In the past, Irish banks did not strictly enforce the details of
mortgage contracts, but times have changed and banks
are now highly motivated to put as many of their
borrowing customers as possible on standard rate
It may be that you have a mortgage specifically provided for a buy to let investment property, but now is the time for you to dig out your mortgage contract and read carefully through the fine print and find out what is, or is not, allowed under its terms.
All information provided by IrishHouses.ie is for general guidance only, is subject to errors and omissions and does not constitute investment, tax, legal or other forms of advice. Always obtain independent professional advice for your own particular situation.
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Updated: Sunday 5th April 2020
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