Danske bank to close retail customer accounts

chughes

handlemaster wrote: »

Any mention of the big tracker write down ;-)

I don't know what a tracker mortgage is........


Got my dear john letter today as well. As the late Maria Von Trapp would have said, so long, farewell, auf wiedersehen, good night

dolallyoh

I was told today by Danske that my offset mortgage is being terminated and to reward me they will reduce the interest by 1%. Anyone know my options ? Contract just says we will ensure that we do not close down your accounts in a way that results in unwanted offset closure...

yop

dolallyoh wrote: »

I was told today by Danske that my offset mortgage is being terminated and to reward me they will reduce the interest by 1%. Anyone know my options ? Contract just says we will ensure that we do not close down your accounts in a way that results in unwanted offset closure...

So where is your mortgage going to?

Not sure if this is correct;
If you have Mortage of 100k, over 25 years at 4.9%
The interest on that is around 73k euro. So they are taking 1% off that, so 730 euro......
I could have that TOTALLY wrong.

Contract just says we will ensure that we do not close down your accounts in a way that results in unwanted offset closure..

Where does it say that in the contract?

josip

dolallyoh wrote: »

I was told today by Danske that my offset mortgage is being terminated and to reward me they will reduce the interest by 1%. Anyone know my options ? Contract just says we will ensure that we do not close down your accounts in a way that results in unwanted offset closure...

I assume it's 1% off the rate and not the amount? Is that then 1% off the variable rate? You should ask/demand instead to be put on to their best tracker rate which is 0.5% above ECB.
One option would be to get as large a group of offset Danske Mortgage holders together as you can and negotiate as a group.
Dankse will try to divide and conquer you individually.

yop

josip wrote: »

I assume it's 1% off the rate and not the amount? Is that then 1% off the variable rate? You should ask/demand instead to be put on to their best tracker rate which is 0.5% above ECB.
One option would be to get as large a group of offset Danske Mortgage holders together as you can and negotiate as a group.
Dankse will try to divide and conquer you individually.

They won't get away with that. 1% is no where near the savings I will make with the offset, its a contract and they are breaking it.
Good idea re the group. Time for a Facebook page maybe, only way to get the word around. Even if its only 10 of it, still more power than one on one.

dolallyoh

yop wrote: »

So where is your mortgage going to?

Not sure if this is correct;
If you have Mortage of 100k, over 25 years at 4.9%
The interest on that is around 73k euro. So they are taking 1% off that, so 730 euro......
I could have that TOTALLY wrong.


Where does it say that in the contract?

Its a "Side letter" which came with the contract. Side letter, Offset T&C, Mortgage Facility Letter - constitutes my agreement with the bank.

Actual wording in the Side Letter is :

TERMINATION

"We will ensure when removing an account from an offset portfolio that validation will take place to ensure that the account is not the last mortgage account of linked account causing an UNWANTED termination off the offset portfolio."



Today's letter paraphrased:

We note you have an offset mortgage. It is not being terminated by this closure.
We are closing all of the other accounts. Once closed we will not consider them against the interest due on the offset mortgage.
We will apply a 1% reduction to the rate if interest applying to your offset (sic) mortgage. Your obligations to us continue .....

yop

dolallyoh wrote: »

Its a "Side letter" which came with the contract. Side letter, Offset T&C, Mortgage Facility Letter - constitutes my agreement with the bank.

Actual wording in the Side Letter is :

TERMINATION

"We will ensure when removing an account from an offset portfolio that validation will take place to ensure that the account is not the last mortgage account of linked account causing an UNWANTED termination off the offset portfolio."



Today's letter paraphrased:

We note you have an offset mortgage. It is not being terminated by this closure.
We are closing all of the other accounts. Once closed we will not consider them against the interest due on the offset mortgage.
We will apply a 1% reduction to the rate if interest applying to your offset (sic) mortgage. Your obligations to us continue .....

Thank for that. Must have a review.

1% isn't going to cut it, the accounts are part of the contract of the mortgage and the initial thoughts from my solicitor is that this is a breach of contract.

I will wait for their letter first.

kennM

yop wrote: »

Thank for that. Must have a review.

1% isn't going to cut it, the accounts are part of the contract of the mortgage and the initial thoughts from my solicitor is that this is a breach of contract.

I will wait for their letter first.

I'm with you there... offset holder too.

Waiting for letter, so they will still allow one account to be open and set off offset? Thats the way I read that letter above. If thats the case then they need to retain retail banking to service those single accounts attached to offset?

makeorbrake

Looks like you should all prepare the exact same letter of response. If they persist, then the ombudsman next stop?

yop

kennM wrote: »

I'm with you there... offset holder too.

Waiting for letter, so they will still allow one account to be open and set off offset? Thats the way I read that letter above. If thats the case then they need to retain retail banking to service those single accounts attached to offset?

No, that single account will not be visible to you, so you will only use it as a link to the offset, it negates the benefit of the offset.
As I said previously the predicted offset benefit to us is anything from 50-70k euro.
1% is an insult and letters like that just want to scare us away.

The lads on Askaboutmoney are on for joining forces as well.

I will see if I can get a facebook page done up and get some numbers as a group.
Fkers robbed us for long enough, time to bite back

yop

makeorbrake wrote: »

Looks like you should all prepare the exact same letter of response. If they persist, then the ombudsman next stop?

Email going to them tonight, they will probably be out for dinner with the Dankse boys though, useless shower

kennM

yop wrote: »

Email going to them tonight, they will probably be out for dinner with the Dankse boys though, useless shower

Can you include thread URL on askaboutmoney.... looks like this will be a fight, can't say I'm surprised to be honest. I have a feeling it will end up with the financial ombudsman anyway. We've signed up for offset mortgages to gain the benefit of credit offsetting against the interest due. Over the life of a mortgage this can easily be in the tens of thousand.... and they offer a fraction of that.

yop

kennM wrote: »

Can you include thread URL on askaboutmoney.... looks like this will be a fight, can't say I'm surprised to be honest. I have a feeling it will end up with the financial ombudsman anyway. We've signed up for offset mortgages to gain the benefit of credit offsetting against the interest due. Over the life of a mortgage this can easily be in the tens of thousand.... and they offer a fraction of that.

http://www.askaboutmoney.com/showthread.php?t=184173&page=6

yop

Ok we will get some momentum on this.

Over the next night or 2 I will create a FB group.
I will post the URL here if that is ok with the Mods.
Share it out as much as you can then and we will see what we can do.

Anyone was to get on the Liiiiiiiiiiveeeeeeeeeeeeeeliiiiiiiiiiineeeeeeeee with Joe "i'm paid too much" Duffy feel free!

If we get a common email together then and all email the ombudsman.

I am not sure what else, Conor Pope is generally good at highlighting banks doing wrong?

Would be better to source a solicitor who has good knowledge in this area and if required we all use that single point of contact.

If there is a fight to fight on this we won't be letting them off.

kennM

Lets not go all guns blazing heavy handed on day 1.....

The 1% is an opening offer in reality. Step 1 is to deal with your provider (Danske Bank) stating that we are unhappy with the position and offer of the bank and invite response.

Do this in writing so that it can then be utilized for further complaint (with Ombudsman/solicitor). According to the Ombudsman you must give the provider and opportunity to deal with your complaint, if resolution is not possible then other routes are appropriate.

https://financialombudsman.ie/complaints-process/default.asp?m=1.

Looks like this could rumble on for a while, lets not waste all of our energy on day 1 of the battle.

yop

kennM wrote: »

Lets not go all guns blazing heavy handed on day 1.....

The 1% is an opening offer in reality. Step 1 is to deal with your provider (Danske Bank) stating that we are unhappy with the position and offer of the bank and invite response.

Do this in writing so that it can then be utilized for further complaint (with Ombudsman/solicitor). According to the Ombudsman you must give the provider and opportunity to deal with your complaint, if resolution is not possible then other routes are appropriate.

https://financialombudsman.ie/complaints-process/default.asp?m=1.

Looks like this could rumble on for a while, lets not waste all of our energy on day 1 of the battle.

No intention of wasting any energy but we need to establish numbers anyway first off. Outside of only 3 or 4 more on these forums I know no other offset mortgage holder. Power in numbers.

Yip we do need to first get the correspondance from them and respond. Then the ombudsman.
Though if they are looking to kill our accounts in the next month or 2 then our time is limited.

kennM

yop wrote: »

No intention of wasting any energy but we need to establish numbers anyway first off. Outside of only 3 or 4 more on these forums I know no other offset mortgage holder. Power in numbers.

Yip we do need to first get the correspondance from them and respond. Then the ombudsman.
Though if they are looking to kill our accounts in the next month or 2 then our time is limited.

My initial thoughts would be to go to the Ombudsman early on this given the timeframe pressures that Danske are imposing. Once I get my letter I'll be contacting them directly and requesting a timeframe for the complaint to be dealt within. On response (depending on nature of response) or on elapsing of that time period I'll be going to Ombudsman.

makeorbrake

If the ombudsmans office see that you have organised - and the potential increased workload, they might be inclined to get this headed off I would have throught. Danske on the other hand probably don't give a fiddlers at this stage - so its a try-on. If it works for a percentage of offset mortgage holders, its worth it from their point of view.

Thoie

I don't have an offset, so can only give you moral support. One thing I'd suggest is if someone can try to do the maths to work out how much an offset is saving you. Do up a spreadsheet with variables for mortgage amount, monthly salary going into the account, mortgage payments (and interest amount - is that fixed or variable for all offset mortgages?), and term. People can use that spreadsheet to work out what their savings would have been, and use it for definite comparison, rather than throwing around "it could be 50k".

E.g. mortgage of 300k, monthly salary going into the account (if that's how it works) of 3k, that reduces my interest by a tenner a month. I pay 700 a month towards the mortgage, therefore by year 5 I'm paying a tenner a month off the capital, further reducing the interest, further reducing the capital, meaning I'll pay off the mortgage in 20 years instead of 25, thereby saving me 50k. (Random made up numbers).

Start out with the "as is" numbers, then draw up a few scenarios where your salary might rise at some stage, and the interest rate might also rise (if it's variable), and come up with a ballpark "loss" that way.

dolallyoh

I have 50% of my mortgage offsetted. Never spent my SSIA.

The sums are easy. I lose out big time. :mad:

JimsAlterEgo

Bottom line AFAIK is I dont have to accept, let he contract run on and keep all of my accounts open. They cant force you. There is nothing in the initial contract to ccater for this scenario.

yop

We got a letter at home, that they are closing our 3 accounts,
1 is my wifes, the other is mine and the 3rd is the one which services the mortgage.
They said that the mortgage product will remain and it states the account.

ZERO mention of Offset and/or a reduction in interest rate.

So they are just playing silly buggers on this.

I remember Newstalk highlighting this, incorrectly, a few weeks ago.
Gonna send them an email now with these developments. See if they can get their crowd onto it.

yop

Thoie wrote: »

I don't have an offset, so can only give you moral support. One thing I'd suggest is if someone can try to do the maths to work out how much an offset is saving you. Do up a spreadsheet with variables for mortgage amount, monthly salary going into the account, mortgage payments (and interest amount - is that fixed or variable for all offset mortgages?), and term. People can use that spreadsheet to work out what their savings would have been, and use it for definite comparison, rather than throwing around "it could be 50k".

E.g. mortgage of 300k, monthly salary going into the account (if that's how it works) of 3k, that reduces my interest by a tenner a month. I pay 700 a month towards the mortgage, therefore by year 5 I'm paying a tenner a month off the capital, further reducing the interest, further reducing the capital, meaning I'll pay off the mortgage in 20 years instead of 25, thereby saving me 50k. (Random made up numbers).

Start out with the "as is" numbers, then draw up a few scenarios where your salary might rise at some stage, and the interest rate might also rise (if it's variable), and come up with a ballpark "loss" that way.

Thats what I did, I have all the monthly figures on how much we saved each month, they send out the letter and it states for that month how much you saved on your offset.

So I have taken each one of those and I have all the account figures and I have averaged out over the last 6 years how much our accounts have gained and based on that I have a figure of how much we potentially can save.
Its not a pie in the sky figure.

ABC101

Current Offset rate is 4.65% (I believe). With the Prestige Current Account package 0.45% is taken off the Offset rate.. so now down to 4.2% interest rate.

So they are proposing a 1% reduction... but is this 4.65%-1% = 3.65% or 4.2% - 1% = 3.2%?

I fear this is a bit of a scam... they offer to reduce your mortgage rate by 1%, but because they are closing your Prestige account, they could really only be reducing your mortgage by 0.55%. What they give with one hand they take away with the other!

On another point... Permanent TSB have a facility on their variable rate mortgage... where you can overpay the monthly payment. But the overpayment does not come off the principle outstanding, it builds up in a separate column as a credit.

Obviously for interest purposes they deduct the credit from the Principle. So it is a sort of offset.. but not it is unusable for day to day banking as it is not a current account.

I'll have to get advice from a solicitor / accountant on Danske closing my offset... no letter yet... but I fear it is in the post.

marathonic

ABC101 wrote: »

Current Offset rate is 4.65% (I believe). With the Prestige Current Account package 0.45% is taken off the Offset rate.. so now down to 4.2% interest rate.

So they are proposing a 1% reduction... but is this 4.65%-1% = 3.65% or 4.2% - 1% = 3.2%?

Some people might be happy enough with this deal if they see no immediate needs for the offset funds. Let's face it, a lot of offset customers have the offset there for peace of mind as opposed to seeing any short-medium term need for the money.

Let's say a €200,000 mortgage with €100,000 offset. You'd be paying 4.65% on the €100,000 net borrowings. If they accept Danske's offer, they no longer have access to the €100,000 offset funds but are now only paying 3.65% on the €100,000 outstanding.

I suspect the 0.45% reduction offered for Prestige Current account holders forms part of the current account T&C's and not the mortgage T&C's. If this is the case, you may forget about that because they're well within their rights to withdraw it.

The rate offered beats the best available residential mortgage rate on the market - although I do expect that the 1% reduction might be increased if holders of these mortgages do put up a bit of a fight.

dolallyoh

True - but if you then need to borrow money for say a car they won't be lending it to you for 3-4 % it will be nearer to 9%.

marathonic

dolallyoh wrote: »

True - but if you then need to borrow money for say a car they won't be lending it to you for 3-4 % it will be nearer to 9%.

Yes, but my point is that there are going to be many people in a position that they don't see any need for funds for the foreseeable future.

For such people, a saving of 1% interest on €100,000 is a sufficient incentive and they'd be more than happy to save up for their next car as opposed to withdrawing the money from their offset account at a cost of 4.65%.

Is the option available to withdraw some of the offset funds before accepting the new deal?

ABC101

@marathonic.

I think you are misunderstanding something about Offset funds.

It's not a case you go from a 200k mortgage to a 100K mortgage if you have 100k offset.

From what I understand... you will still have a 200K mortgage.

The funds that are in your other accounts... i.e. current accounts... they will be returned to you.

For example... you have a mortgage of 200K and you also have 10K in your current account, as you use the funds in your current account during the month the balance of the current account will vary, ie. 10K on the 1st, down to 2K on the 27th, then you get your salary paid, and back up to 7K on the 29th.

The daily balance of the current account is deducted from the daily balance of the Mortgage account, so on some days you might have a NET balance of -190K, rising to -198K on the 27th of the month, and a net balance of -193K on the 29th of the month etc

So if Danske close the Offset mortgage... you still have a mortgage of 200K.. except the interest is charged at 3.65 or 3.2% instead of being charged at 4.65%

And your balance of your current account is given back to you, its not deducted from your mortgage balance. One will have to then lodge this to another bank etc

yop

ABC101 wrote: »

@marathonic.

I think you are misunderstanding something about Offset funds.

It's not a case you go from a 200k mortgage to a 100K mortgage if you have 100k offset.

From what I understand... you will still have a 200K mortgage.

The funds that are in your other accounts... i.e. current accounts... they will be returned to you.

For example... you have a mortgage of 200K and you also have 10K in your current account, as you use the funds in your current account during the month the balance of the current account will vary, ie. 10K on the 1st, down to 2K on the 27th, then you get your salary paid, and back up to 7K on the 29th.

The daily balance of the current account is deducted from the daily balance of the Mortgage account, so on some days you might have a NET balance of -190K, rising to -198K on the 27th of the month, and a net balance of -193K on the 29th of the month etc

So if Danske close the Offset mortgage... you still have a mortgage of 200K.. except the interest is charged at 3.65 or 3.2% instead of being charged at 4.65%

And your balance of your current account is given back to you, its not deducted from your mortgage balance. One will have to then lodge this to another bank etc

Absolutely, if the accounts aren't there then it negates the Offset.

I am self employed so the money in my account come Sept/Oct is ALL my tax to be paid, if its a good year that is a nice amount of money.
1% in my case is an insult, it MAY suit others though who never have a good amount in their accounts at various stages of the month and it really doesn't effect the amount their interest is calculated against.

But in my own case, and I would need to check this, we are currently saving circa 320 euro PER MONTH on interest due to having an Offset mortgage.

jmcc99_98

I have still not received correspondence regarding my tracker mortgage or my credit card. I understand that with the Credit Card Danske are talking about two months to pay it off in full or come to an arrangement to pay it off over 2 years. Has anyone had confirmation that if you pay the balances off over two years that these will be "Bad marks" on your credit history?

Is there no way that Danske could just transfer the balances to a personal loan arrangement and let you pay them over 2 years.

Has anyone had legal advice or similar on this matter - it seems terribly terribly unfair to get landed with a bad credit rating essentially on the decision of Danske to move, and your inability to pay something off immediately which you have serviced up until now, paid high interest on and also genuinely believed you could pay off over a longer period