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AIB current tracker rate

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  • 03-06-2013 9:26pm
    #1
    Dr.Tom
    Registered Users Posts: 188 ✭✭


    Evening all,

    We are coming to the end of our 5 year fixed rate mortgage in October and I am just after reading the small print on our mortgage and we have, amongst others, the option to revert to tracker mortgage after the fixed period expires. My question is does anyone know at present what AIB are adding onto the current ECB rate?? Ive a feeling they are gonna pull a ridiculous figure out of the sky for me come October. Thanks.


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    #2
    Dr.Tom
    Registered Users Posts: 188 ✭✭Dr.Tom


    Just to add i have discovered that it doesn't actually mention a tracker rate on the original contract. From what I have read it usually outlines the rate you will return to after the fixed period finishes. Is this not a bit strange :confused:


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    #3
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    Dr.Tom wrote: »
    Just to add i have discovered that it doesn't actually mention a tracker rate on the original contract. From what I have read it usually outlines the rate you will return to after the fixed period finishes. Is this not a bit strange :confused:

    In Sept or so you'll get a letter from AIB outlining your rate options. If you are entitled to a Tracker Rate this will be one of the options. Just read the various options very carefully as banks have a habit of hiding the tracker option near the bottom of the second page!!


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    #4
    Dr.Tom
    Registered Users Posts: 188 ✭✭Dr.Tom


    killers1 wrote: »
    In Sept or so you'll get a letter from AIB outlining your rate options. If you are entitled to a Tracker Rate this will be one of the options. Just read the various options very carefully as banks have a habit of hiding the tracker option near the bottom of the second page!!

    Thank you for your reply. Its only by chance I stumbled across this whole topic on the web and when I dug out my contract I was surprised to see I had that option. The only thing now though is the more I read into the "at the Bank's then prevailing rates appropriate to the Mortgage Loan" then it seems it leaves the ball in their court with regards to setting a rate seeing as I have no ECB rate + whatever amount stated on my contract??


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    #5
    roro2
    Registered Users Posts: 412 ✭✭roro2


    It sounds like you were never on a Tracker rate (did you go straight to the 5-yr fixed on drawdown?) and you say there's no mention of a Tracker rate on the original letter of offer... this is going to make it very difficult to get a Tracker now.

    As for your Q, if you do have the option of reverting to a Tracker, the spread above ECB will be the same as initially - the bank can't change the spread above ECB for those reverting back to Trackers - otherwise they wouldn't have any issues with Tracker mortgages.


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    #6
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    roro2 wrote: »
    It sounds like you were never on a Tracker rate (did you go straight to the 5-yr fixed on drawdown?) and you say there's no mention of a Tracker rate on the original letter of offer... this is going to make it very difficult to get a Tracker now.

    As for your Q, if you do have the option of reverting to a Tracker, the spread above ECB will be the same as initially - the bank can't change the spread above ECB for those reverting back to Trackers - otherwise they wouldn't have any issues with Tracker mortgages.

    I would tend to agree based on posts so far.
    "at the Bank's then prevailing rates appropriate to the Mortgage Loan"

    I would personally consider this to be a SVR which corresponds to the LTV ratio of the mortgage. So there will be different rates based on how much the mortgage is in proportion to the value of the house.

    OP, I think you should read the contract more to see if you could be on a tracker. Also talk to the bank and ask them if you should be.


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    #7
    Dr.Tom
    Registered Users Posts: 188 ✭✭Dr.Tom


    roro2 wrote: »
    It sounds like you were never on a Tracker rate (did you go straight to the 5-yr fixed on drawdown?) and you say there's no mention of a Tracker rate on the original letter of offer... this is going to make it very difficult to get a Tracker now.

    As for your Q, if you do have the option of reverting to a Tracker, the spread above ECB will be the same as initially - the bank can't change the spread above ECB for those reverting back to Trackers - otherwise they wouldn't have any issues with Tracker mortgages.

    Correct....I was never on it,i was 5 year fixed straight away on drawdown. Im sure trackers were still available by Aib in Oct 08 so im wodering where I will stand seeing as I have the option to revert to one but at no specified rate. As I said I only stumbled across this whole topic over the weekend so anything saved in October would be a bonus,if not I wont start crying.


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    #8
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    Dr.Tom wrote: »
    Correct....I was never on it,i was 5 year fixed straight away on drawdown. Im sure trackers were still available by Aib in Oct 08 so im wodering where I will stand seeing as I have the option to revert to one but at no specified rate. As I said I only stumbled across this whole topic over the weekend so anything saved in October would be a bonus,if not I wont start crying.

    What was the wording of this? Did it specifically mention a tracker or was it worded a different way?


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    #9
    Dr.Tom
    Registered Users Posts: 188 ✭✭Dr.Tom


    chris85 wrote: »
    What was the wording of this? Did it specifically mention a tracker or was it worded a different way?

    What exactly do you mean?? Im slightly confused.


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    #10
    roro2
    Registered Users Posts: 412 ✭✭roro2


    I'm not sure why you think you have the option of going on to a Tracker rate now - could you give the exact wording of where this is outlined?
    Even if a Tracker is mentioned somewhere in the original documentation this doesn't necessarily give the right to get a Tracker now - whatever the reference is would probably only apply if you chose a Tracker initially, and there's also several other pages of mortgage terms and conditions to take into account. My understanding of these cases is that if you've never had a Tracker you are not entitled to "revert" to one now. By all means request a Tracker rate now, even just to potentially benefit from an admin error (not unusual) but the fact that a specific rate spread is never mentioned would concern me.


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    #11
    Dr.Tom
    Registered Users Posts: 188 ✭✭Dr.Tom


    At the end of any fixed interest rate period, the Customer may choose between:(a) a further fixed interest rate period, or(b) conversion to a variable interest rate Mortgage Loan, or(c) conversion to a tracker interest rate Mortgage Loan,at the Bank’s then prevailing rates appropriate to the Mortgage Loan

    Thats the way its worded.....


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    #12
    Trish56
    Registered Users Posts: 1,256 ✭✭✭Trish56


    AIB withdrew their tracker rates on 10th October 2008 so unless your offer letter specified that on expiry of the fixed rate that you would move to a tracker of 2% or whatever rate over ECB I don't really think you have a case.
    I have seen cases where a fixed rate was selected originally with an option to revert to a tracker on expiry and I have many customers on such tracker rates with different lenders.


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    #13
    Tombo2001
    Registered Users Posts: 6,652 ✭✭✭Tombo2001


    OP I would be giving a solicitor a call on this.


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    #14
    roro2
    Registered Users Posts: 412 ✭✭roro2


    Dr.Tom wrote: »
    At the end of any fixed interest rate period, the Customer may choose between:(a) a further fixed interest rate period, or(b) conversion to a variable interest rate Mortgage Loan, or(c) conversion to a tracker interest rate Mortgage Loan,at the Bank’s then prevailing rates appropriate to the Mortgage Loan

    Thats the way its worded.....

    I suggest the bank's response would be: Option (c) is not part of the bank's current package of mortgage rates... the end of the sentence is where they cover themselves. A legal professional may interpret it differently, but I wouldn't waste much time on it. Even if the bank conceded your point (they won't), what's to stop them saying you can have a tracker interest rate of ECB + 5%.


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    #15
    Tombo2001
    Registered Users Posts: 6,652 ✭✭✭Tombo2001


    The truth is that, and I dont mean to be rude to the other posters, what the OP is getting here is well intentioned guess-work.

    Nobody who has responded knows the answer.

    If the OP wants well-intentioned guess work, then thats one thing.....this is a legal situation and he/ she should get a legal opinion to get a clear answer.


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    #16
    roro2
    Registered Users Posts: 412 ✭✭roro2


    Which are a lot more expensive than people's opinions.

    Of course nobody here knows the answer, nobody here has access to the OP's contracts/correspondence with the bank, account details, etc. But some people here may be more familiar with bank processes than the OP.

    The next step would surely be to ask the bank anyway, which is also free.


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    #17
    Dr.Tom
    Registered Users Posts: 188 ✭✭Dr.Tom


    I was hoping someone might have been in a similiar situation. No panic a while anyway. Its there in black and white for me so I've every intention of querying it haha...


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    #18
    Tombo2001
    Registered Users Posts: 6,652 ✭✭✭Tombo2001


    roro2 wrote: »
    Which are a lot more expensive than people's opinions.

    Of course nobody here knows the answer, nobody here has access to the OP's contracts/correspondence with the bank, account details, etc. But some people here may be more familiar with bank processes than the OP.

    The next step would surely be to ask the bank anyway, which is also free.


    Yes they are.

    And a tracker is worth a lot of money.


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    #19
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    Trish56 wrote: »
    AIB withdrew their tracker rates on 10th October 2008 so unless your offer letter specified that on expiry of the fixed rate that you would move to a tracker of 2% or whatever rate over ECB I don't really think you have a case.
    I have seen cases where a fixed rate was selected originally with an option to revert to a tracker on expiry and I have many customers on such tracker rates with different lenders.

    They withdrew trackers from new products. They must honour a tracker if thats what the original mortgage agreement had on it. A customer on a fixed rate mortgage always has a mortgage agreement at the start with a SVR or tracker rate. The fixed rate is always an option taken for a period of time and the option remains to revert back to the original mortgage must be honoured.

    So basically the OP needs to check the wording of the orignal agreement that it specifically says the mortgage product is a tracker, if it does the OP has no question of being entitled to a tracker rate. The wording is very important.


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    #20
    Dr.Tom
    Registered Users Posts: 188 ✭✭Dr.Tom


    chris85 wrote: »
    A customer on a fixed rate mortgage always has a mortgage agreement at the start with a SVR or tracker rate. The fixed rate is always an option taken for a period of time and the option remains to revert back to the original mortgage must be honoured.

    This is the thing you see. My contract has a specified SVR but no tracker rate yet I have the option to choose a tracker after my 5 year fixed is up????


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    #21
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    Dr.Tom wrote: »
    This is the thing you see. My contract has a specified SVR but no tracker rate yet I have the option to choose a tracker after my 5 year fixed is up????

    It specifically says tracker yes? Sorry to be pedantic about it but very important for you to get the right rate.


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    #22
    Dr.Tom
    Registered Users Posts: 188 ✭✭Dr.Tom


    chris85 wrote: »
    It specifically says tracker yes? Sorry to be pedantic about it but very important for you to get the right rate.

    100% gives me a tracker option but with no rate


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    #23
    roro2
    Registered Users Posts: 412 ✭✭roro2


    Dr.Tom wrote: »
    100% gives me a tracker option but with no rate

    By this, do you mean the "a, b, c, subject to the bank's then prevailing interest rates" that you outlined in a previous post? I don't think this is enough to get you a Tracker rate now. Is a Tracker rate mentioned elsewhere, such as the first page of the offer letter which outlines the amount, interest rate, etc. You said that your contract has a "specified SVR" - is the interest rate quoted on the first page the SVR?


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    #24
    Trish56
    Registered Users Posts: 1,256 ✭✭✭Trish56


    Dr.Tom wrote: »
    At the end of any fixed interest rate period, the Customer may choose between:(a) a further fixed interest rate period, or(b) conversion to a variable interest rate Mortgage Loan, or(c) conversion to a tracker interest rate Mortgage Loan,at the Bank’s then prevailing rates appropriate to the Mortgage Loan

    Thats the way its worded.....

    (c) states... conversion to a tracker interest rate Mortgage Loan, at the Bank's then prevailing rates appropriate to the Mortgage Loan...my reading of this is that a tracker rate is no longer available so will not be offered. If the loan offer mentioned that the mortgage loan will revert to a tracker of rate of a specific % over ECB well then you are entitled to that rate..


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    #25
    Dr.Tom
    Registered Users Posts: 188 ✭✭Dr.Tom


    roro2 wrote: »
    By this, do you mean the "a, b, c, subject to the bank's then prevailing interest rates" that you outlined in a previous post? I don't think this is enough to get you a Tracker rate now. Is a Tracker rate mentioned elsewhere, such as the first page of the offer letter which outlines the amount, interest rate, etc. You said that your contract has a "specified SVR" - is the interest rate quoted on the first page the SVR?

    This is exactly what I mean. The rate quoted on the first page is the SVR.


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    #26
    Dr.Tom
    Registered Users Posts: 188 ✭✭Dr.Tom


    Trish56 wrote: »
    (c) states... conversion to a tracker interest rate Mortgage Loan, at the Bank's then prevailing rates appropriate to the Mortgage Loan...my reading of this is that a tracker rate is no longer available so will not be offered. If the loan offer mentioned that the mortgage loan will revert to a tracker of rate of a specific % over ECB well then you are entitled to that rate..

    Looks like an avenue not worth looking into so....worth a try anyway


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    #27
    Mountjoy Mugger
    Registered Users Posts: 4,487 ✭✭✭Mountjoy Mugger


    There's an old thread on askaboutmoney.com with a poster in a similar situation.

    The poster went to the Ombudsman, and won the case - however, the deal AIB offered wasn't exactly enticing.


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    #28
    Dr.Tom
    Registered Users Posts: 188 ✭✭Dr.Tom


    Mountjoy Mugger wrote: »
    There's an old thread on askaboutmoney.com with a poster in a similar situation.

    The poster went to the Ombudsman, and won the case - however, the deal AIB offered wasn't exactly enticing.

    I must look for that


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    #29
    Trish56
    Registered Users Posts: 1,256 ✭✭✭Trish56


    After reading the 'Ask about Money' thread it looks like you definitely have a case. Wait until you get your options letter in September and if a tracker rate is not offered... take it to the Ombudsman and you should win....
    Great to learn something new
    Best of luck.


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    #30
    Dr.Tom
    Registered Users Posts: 188 ✭✭Dr.Tom


    Trish56 wrote: »
    After reading the 'Ask about Money' thread it looks like you definitely have a case. Wait until you get your options letter in September and if a tracker rate is not offered... take it to the Ombudsman and you should win....
    Great to learn something new
    Best of luck.

    Excellent stuff...


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    #31
    cloughy
    Registered Users Posts: 180 ✭✭cloughy


    just wondering how you got on, we got a note today about a fixed rate coming to an end, and in first letter no mention of tracker rate but only fixed and variable, but following day got a letter saying under our T&C's we should be offered a tracker and the rate is ecb + 4.91% meaning 5.16%, but we never got this option on the expiry of previous fixes in 2009 or 2012, when I think if they are now offering us now the option they should have, and you would have hoped that the margin in 2009 would have been closer to the worst margins on trackers (if there is such a thing). We are with AIB and just looking if you got any joy with this or how you proceeded.


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