BANKS are turning a blind eye to homeowners with valuable tracker mortgages who rent out their homes because they cannot afford their mortgages.
People who no longer live in a home and rent it out are not entitled to keep their trackers.
If banks moved to take away their trackers, it would mean thousands of euro in higher repayments. Around 180,000 mortgage accounts are in trouble and 373,000 homeowners have trackers.
But the banks are turning a blind eye to the situation that has seen thousands forced to move out and rent their homes, it has emerged.
Officially, the banks insist they will remove a good-value tracker from anyone who rents out their home as the homeowner moves from being a residential customer to being a commercial client.
However, evidence from a survey conducted over the last two years on Askaboutmoney.com shows that most banks have not opted to strip people of their trackers, even when they know properties are being rented out. Banking sources told the Irish Independent they were prepared to turn a blind eye to homes being rented out. This is despite the banks knowing the terms of the tracker deals are being contravened.
Tracker mortgages offer the cheapest mortgage rates on the market.
But job losses and austerity have forced thousands with trackers to let their homes, move back in with parents or rent a smaller property.
National Irish Bank, which has some trackers set as low as 0.5pc above the European Central Bank rate, states in tracker contracts that if the house is no longer used as a home, then a different mortgage rate will apply.
Permanent TSB said yesterday it would apply an investment mortgage rate to those who rent out a home.
Mortgage adviser Karl Deeter said large numbers of those with trackers were being forced to rent out their homes, but were not telling the bank.
In these circumstances, it was hard for banks to find out that the original owners no longer lived in the home, he said.