Tracker mortgages: make sure you don’t miss out!

Yesterday the Examiner broke a story about tracker mortgage holders potentially missing out because they are not reading their terms and conditions. This is an issue we have seen first hand in our company, but it wasn’t due to not reading the terms and conditions, it was down to a bank error.

Recently Bank of Ireland had to put 2,000 accounts back on trackers after they mistakenly took them off and onto variable rates. AIB made the same mistake 214 times and PTsb did it 53 times.

In our own brokerages case we saw something similar recently with PTsb, they insisted to a client that no tracker was available. Then, only after the client remortgaged did they admit their error and offer it back. We represented the client in this case and insisted that all costs were also covered in reinstating the mortgage. This means paying solicitor fees, losses on clawbacks, breakage fees for the fixed rate undertaken etc.

Where this happens has tended to be where people come off of fixed rates and in their ‘rate choice letter’ (a letter you get c. 60-90 days before fixed rate expiration) the tracker is not mentioned. Several banks have made this error and thankfully it is becoming more rare as internal audits have identified and remedied the problem in many cases.

Our advice is (as per interview with Newstalk today) to write a short letter if you are coming off a fixed rate to your lender and ask ‘is a tracker available, if not then please point out the clause that indicates this and why’. This should at least ensure that your loan gets a diligent ‘once over’ by the lender who should be able to tell without doubt what the situation is once they go through your paperwork.

One Comment

  1. Hi MArk

    My Fixed rate mortgage of 4.99% finished. I was offered a tracker but the rate was 4.75%. The ECB rate at the time I took the mortgage was (November 2006) was 3.25% My Mortgage Standerisation terms show the tracker after year 5 would be 4.75% which was a margin of 1% above ECB rate. The bank are now telling me they want to take a margin of 3.25%. My Mortgage clearly says that the margin rate on a tracker cannot change over the term of the mortgage. Can you confirm that the bank must offer me ECB plus 1% which today would be 2.25% not 4.75% they are quoting

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