ICS Tracker mortgage... Advice

Stephenduffy08

Hi,
My fixed rate with ics is up next may (2013) I bought the house in 2006 with a friend of mine (yes i know... rolls eyes, but we were advised at the time) and signed up to a fixed rate, then we fixed again for 3 years which brings us up till may. Naively I never knew I had a tracker mortgage until recently when I rang the bank for a copy of mortgage statements the girl told me that when our fixed is up we will be given the tracker rate as per our original agreement, sure enough I asked for a copy of the original loan offer and it states :

"Subject to clause 6(c), at all times when a variable interest rate applies to the loan the interest rate chargeable will vary at the society's discression upwards or downwards, if at any time a variable rate of interest applies, repayments in excess of those agreed may be made at any time during the term of the loan without penalty."

And another :
"The interest rate applicable to the loan is a fixed rate and is fixed for the period set out in part 1 of this offer letter. At the end of the fixed rate period the lender shall have the sole discretion to provide any further or subsequent fixed rate period. If the lender does not provide such a further or subsequent fixed rate period or if the lender offers the borrower a choice of interest rate at the end of any fixed rate period and the borrower fails to excercise that choice then in either case, in accordance with the general conditions 7(b) of the offer letter, the interest rate applicable to the loans ill be a variable interest rate."

"This variable interest rate may vary upwards or downwards. The interest rate shall be no more than 1.25%. Above the European Central Bank main refinancing operations minimum rate ("repo rate") for the term of the loan.
Variation in interest rates shall be implemented by the lender not later than close of business on the 5th working day following a change in the repo rate by the European Central Bank.
Notification shall be given to the borrower of any variation in interest rate in accordance with the general condition 6(b) of this offer letter.
In the event that, or at any time, the repo rate is certified by the lender to be unavailable for any reason the interest rate applicable to the loan shall be prevailing home loan variable rate"

Now... Myself and friend lived in the house for 2.5 years and it has been rented out ever since, ( I met my future wife and moved on etc..) we pay our annual income tax to the revenue for the property, we register and pay Prtb for tenants, proper tenancy insurance and are completely above board, also stopped our TRS when we moved out and we have never missed or been behind on one single payment ever.

I cannot find anywhere in the original loan offer that says we cannot move out and rent the house out, it does not mention anywhere about it being our PPR or our main dwelling or anything like it, I have searched and searched through it, it just keeps referring to the mortgage as the loan for the property etc...

Can anyone give me some light on this will or could they try and take the tracker off us ? Or are they obliged to pass it to us..

I really didn't know what a tracker mortgage was

Thank you for any insight or advice on this

killers1

Stephenduffy08 wrote: »

Hi,
My fixed rate with ics is up next may (2013) I bought the house in 2006 with a friend of mine (yes i know... rolls eyes, but we were advised at the time) and signed up to a fixed rate, then we fixed again for 3 years which brings us up till may. Naively I never knew I had a tracker mortgage until recently when I rang the bank for a copy of mortgage statements the girl told me that when our fixed is up we will be given the tracker rate as per our original agreement, sure enough I asked for a copy of the original loan offer and it states :

"Subject to clause 6(c), at all times when a variable interest rate applies to the loan the interest rate chargeable will vary at the society's discression upwards or downwards, if at any time a variable rate of interest applies, repayments in excess of those agreed may be made at any time during the term of the loan without penalty."

And another :
"The interest rate applicable to the loan is a fixed rate and is fixed for the period set out in part 1 of this offer letter. At the end of the fixed rate period the lender shall have the sole discretion to provide any further or subsequent fixed rate period. If the lender does not provide such a further or subsequent fixed rate period or if the lender offers the borrower a choice of interest rate at the end of any fixed rate period and the borrower fails to excercise that choice then in either case, in accordance with the general conditions 7(b) of the offer letter, the interest rate applicable to the loans ill be a variable interest rate."

"This variable interest rate may vary upwards or downwards. The interest rate shall be no more than 1.25%. Above the European Central Bank main refinancing operations minimum rate ("repo rate") for the term of the loan.
Variation in interest rates shall be implemented by the lender not later than close of business on the 5th working day following a change in the repo rate by the European Central Bank.
Notification shall be given to the borrower of any variation in interest rate in accordance with the general condition 6(b) of this offer letter.
In the event that, or at any time, the repo rate is certified by the lender to be unavailable for any reason the interest rate applicable to the loan shall be prevailing home loan variable rate"

Now... Myself and friend lived in the house for 2.5 years and it has been rented out ever since, ( I met my future wife and moved on etc..) we pay our annual income tax to the revenue for the property, we register and pay Prtb for tenants, proper tenancy insurance and are completely above board, also stopped our TRS when we moved out and we have never missed or been behind on one single payment ever.

I cannot find anywhere in the original loan offer that says we cannot move out and rent the house out, it does not mention anywhere about it being our PPR or our main dwelling or anything like it, I have searched and searched through it, it just keeps referring to the mortgage as the loan for the property etc...

Can anyone give me some light on this will or could they try and take the tracker off us ? Or are they obliged to pass it to us..

I really didn't know what a tracker mortgage was

Thank you for any insight or advice on this

Just before your fixed rate expires you'll get a letter from ICS outlining the rates available I.e fixed, variable & tracker. If you don't respond to this correspondence you will automatically revert to a tracker of 2% based on current ECB rate. It's a fairly straightforward decision...

Stephenduffy08

Really... Is it that straightforward ? I've been reading a lot about the banks will try anything to wriggle their way out of giving them back to you (or try to take them away from you), i just want to make sure I am armed and equipped with as much info as possible should a situation arise with them, now I realise we have one I'm terrified of losing it somehow by some kind of default or highly coded clause.

Thanks for your reply

killers1

Stephenduffy08 wrote: »

Really... Is it that straightforward ? I've been reading a lot about the banks will try anything to wriggle their way out of giving them back to you (or try to take them away from you), i just want to make sure I am armed and equipped with as much info as possible should a situation arise with them, now I realise we have one I'm terrified of losing it somehow by some kind of default or highly coded clause.

Thanks for your reply

Yes, it's that straightforward. The terms and conditions you quoted simply mean that if you fail to pick an option from the rate options letter they send you prior to the expiry of the current fixed rate you will automatically revert to a tracker. These are the T&C's of your loan offer so they have no choice but to put you on a tracker rate

Stephenduffy08

Does it matter if we have the house rented out ? Do same rules apply

BuffyBot

now seems like a good point to remind folks about the clause in the forum charter regarding dodgy dealing..

phormium

The earlier the tracker dates from the less likely it is that there is any clause in it re renting, most banks offered the same rates to buy to let customers as they did to owner occupier back in the day so it was not always a standard clause as there was no difference in rates.

Have a good read of your loan offer, if it doesn't say anything about the rate being dependant on owner occupier then you should not lose your tracker or be moved to a higher rate.

charleville

I had exact same situation...we were fixed for the very first 2 years (06-08)
After that we were offered the tracker + 7 different types of other rates fixed variable etc.. so we fixed for 2 years (08-10)
2 years on in 2010 we got sent out another offer letter, this time there was no offer of the tracker rate, all that was on it was option of 3 different fixed rates, we went with the 3 year fixed rate, again there was no offer or mention of the tracker this time.
Now... Here's where it gets interesting, but our fixed rate was up in may this year and the bank sent out the usual offer letter except this time the tracker was on it again, obviously we took the tracker (actually we just done nothing and it automatically got put on to it) but why did they not offer it to me in 2010 and did offer it every other time including this year ?
We were very naive when it came to the mortgage stuff back then, not now though that's why I'm asking questions,

Thanks for any help

murphaph

Stephenduffy08 wrote: »

Does it matter if we have the house rented out ? Do same rules apply

The only thing that matters is your loan agreement with ICS. If it doesn't stipulate that the loan is for an owner occupied property and doesn't stipulate that the property may not be let, then there's nothing ICS can do.

Some loan agreements prevented letting without written consent from the bank. Some were even more explicit and stated a different rate (higher) should the property be let. The agreements are all different so without access to your agreement nobody here can say for certain.