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Tracker Issue

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  • 21-06-2011 9:42am
    #1
    taldar
    Registered Users Posts: 38 ✭


    Hi all
    Need some advice please

    18 months into a 2 year fixed rate mortgage I contacted the bank by phone wondering what we could do as wife was going on maternity leave. The bank informed me we would be going to a variable rate at the end of the two years fixed, i asked could we go to the variable now as it was lower and they said yes, no penalty, just send in a note saying this signed by the two of you. That was nearly 2 and a half years ago.
    I checked my original contact recently and found we should have been moved to a tracker after the two year fixed, not a variable rate.

    "7. Without affecting the entitlement for the borrower to apply at any time to fix the rate for a
    further period (if available) and in variation of general mortgage loan approval condition
    5.1, on expiry of the fixed rate period the interest rate applicable to the loan will not be
    more than 1.10% over the European Central Bank refinancing rate (the "ECB Rate") as
    varied by the European Central Bank (the "ECB"). In the event of any variation of the
    ECB rate, the interest rate applicable to this loan will not be more than 1.10% over the
    ECB rate as varied by the ECB."

    I contacted the bank by phone with this information, first they said we did not have the offer of a tracker in the original contract, they have since agreed there is.

    Now they are saying we broke the two year fixed and will not honour the tracker rate in the original loan offer.

    My take on this is we made the decision to move off fixed as it had no implications to anything because we were mis-informed about the variable rate at the end of the two year fixed. Obviously we would never have moved off the fixed if the bank had told us there was a tracker at the end of the two year fixed. The fact they said it was not in my loan offer backs up that they thought I should be going to a variable rate and mis-informed us.

    Also there are central bank rules that state if a customer is giving up a tracker they must inform the customer in detail and in writing, please see the link
    http://www.independent.ie/business/personal-finance/property-mortgages/bank-of-ireland-forced-to-put-customers-back-on-trackers-2639252.html

    "The bank had failed to observe Central Bank rules about the need to warn the customers of the cost implications of giving up a tracker"
    "The Central Bank has strict rules requiring lenders to set out in detail and in writing to customers the exact cost of giving up a tracker"

    We are in the process of making a formal complaint, has anyone else heard of this sort of thing or have any recommendations?

    Cheers


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