Newstalk - fixed and tracker mortgages

screamer

Did anyone hear this item on newstalk this morning? From what I gathered, it seems if you were on a fixed mortgage after 2004, when you came off it, the bank had to offer a variable or TRACKER rate..... did anyone else hear this article? Did I mis-understand?

seamus

You may have misunderstood a little or perhaps it was communicated wrongly. When you go on a fixed rate mortgage, there is still an underlying agreement on which your mortgage is based. When your fixed rate ends, the bank is obliged to offer you the original agreement in addition to any new rates.

So in a lot of cases people would have had a tracker as their "base" rate when they took a fixed term. When the fixed term ended, the bank were contractually obliged to offer the tracker again.
If someone didn't have a tracker mortgage when their fixed term began, the bank doesn't have to offer them a tracker when it ends.

This was the case for a lot of people who took out mortgages in the last five years. Many people opt to fix for the first couple of years to give them stability when they are just getting settled. During the fixed period, the banks stopped offering tracker rates to new customers.
But because these fixed customers had opted for a tracker rate when they started their fixed period, the bank are obliged to offer them the tracker rate when the fixed period ends.
This is what happened to me.

At this point though I imagine most banks will not allow an existing tracker customer to have a fixed period without signing away their tracker rate first.

chris85

screamer wrote: »

Did anyone hear this item on newstalk this morning? From what I gathered, it seems if you were on a fixed mortgage after 2004, when you came off it, the bank had to offer a variable or TRACKER rate..... did anyone else hear this article? Did I mis-understand?

Of course they have to offer a variable or tracker rate, its the only other two products out there apart from fixed.

If you were on a tracker before fixing you have to be put on a tracker after fixed period ends.

If you were on a variable before fixing you go back on to a variable rate.

raglan

We were on a tracker before NAIVELY fixing our mortgage, we weren't offered any choices, just that our mortgage would revert to svr when fixed term ended..........and unfortuantely didn't have a clue what the implications of this would mean and that by signing form we would lose tracker. Forwarded complaint to Ombudsman but we lost

Dodge

Took out a mortgage in 2003 at fixed 'introductary' rate for 2 yeas (discount only applied for one year)

As we came towards the end of that 2 year period, bank offered us a variety of fixed terms (1, 2, 5 years) or the option to go on a variable or tracker rate. I remember clearly the note saying that if we didn't contact them we would automatically be placed on the tracker rate

phew...

lucybousy

i fixed my mortgage in october 2006 and just got my option letter yesterday with no tracker rate option on the letter only 5.1% apr svr rate. im with ulster bank but when i signed for fixing theres nothing on it saying what id revert to il post what it states on letter when i fixed



AT THE END OF THE FIXED PERIOD: Ulster Bank Ireland Limited may offer to continue the advance for such a period and at such a fixed rate as it may decide. It may also offer alternative available products. If such offer is made and you elect to accept then you must do so in writing, your acceptance to be signed by all parties to the mortgage and to be received by Ulster Bank Ireland Limited. If of no such offer is made or if an offer is made and no acceptance received as prescribed above, then, from the day following the expiry of any option selected above, the Ulster Bank Home Loan Rate shall apply in accordance with General condition 2 of the Offer of Advance originally accepted by you being the Bank's General Conditions Relating to Advances by Ulster Bank Ireland Limited House Mortgages Section, which varies the Interest Rate, and the said General Conditions relating to the Advances shall be construed accordingly.

General condition 2 of the Offer of Advance is as follows:

Interest is calculated on the balance outstanding on the home loan at the close of business each day from the date of release of the advance monies until the home load is repaid. Interest so calculated is charged on the last day of the calender month in which release of funds takes place and on the last day of each calender month thereafter until the home loan is repaid. Interest charged to the home loan is included in the outstanding balance on which interest is calculated. The outstanding balance on which interest is calculated will include any overdue repayments and other sums outstanding. Overdue repayments and other sums outstanding will be included in the outstanding balance from the date on which they are debited to the home loan account until the date on which they are discharged. If redemption of the home loan takes place mid month the amount required to redeem the loan will include interest from the first day of the month in which redemption takes place to the date of redemtion. The monthly repayments will vary if changes in the Home Loan Interest Rate occur. Variation in Ulster Bank Home Loan Rate may occur at any time and notice of each variation will be published at least once in a national daily newspaper. Interest is calculated on a compound basis.

Drawdown date of your mortgage will be the date on which the advance monies are issued. If drawdown date is before the date on which direct debits are raised in any given month the first repayment will be on the 1st of the month following the month in which drawdown takes place and will be interest only on the amount drawndown from the date of drawdown until month end. This repayment will be in addition to the number of repayment instalments shown on the schedule of inmportant information. If drawdown date is after the date on which direct debits are raised in any given month interest will be charged on the last day of the month on the amount drawn down from date of drawdown until month end. This interest will be added to your first normal repayment on the 1st of the month following the month which follows the month in which drawdown takes place. In this case the total number of repayments will be as shown under the number of repayment instalments in the schedule of important information.

APR calculation assumes that drawdown of the loan will take place on the 15th of the month following the month in which the Offer of Advance issues.


The Special Conditions Relating To Loan xxxxxxxx:

The rate of the Ulster Bank Flexible Mortgage Tracks the ECB rate with a margin which is fixed for the life of the home loan term. THE MARGIN OF THIS HOME LOAN IS ECB RATE PLUS O.85%. This margin is dependent on the amount borrowed and the value of the property to be mortgaged.

killers1

Have another look at the letter you got from Ulster Bank recently giving your new options now at end of fixed period. If tracker rates were available when you took out the loan it should say what rate you revert to automatically without contacting them? The tracker rate is usually quoted at the end of the second page in the Bank's hope that you'll opt for a different fixed or SVR before you read that far...

chris85

killers1 wrote: »

Have another look at the letter you got from Ulster Bank recently giving your new options now at end of fixed period. If tracker rates were available when you took out the loan it should say what rate you revert to automatically without contacting them? The tracker rate is usually quoted at the end of the second page in the Bank's hope that you'll opt for a different fixed or SVR before you read that far...

It doesnt matter if trackers were available when the agreement taken out. Its a case of did the person get a tracker when agreement signed. Could of went for a standard variable mortgage product instead.

lucybousy

i checked the letter it states i automatically go on to standard variable rate if i dont choose another product. im going send them a letter asking what clause there not giving me the tracker mortgage back. and il go ombundsman its too much money to let it go without a fight

Inkers92

Hi all, I have a query in relation to this topic. I originally took out my mortgage in Jan 2005 with PTSB on an introductory rate. When this was up NIB were offering better rates so I switched to them (2006), taking up a three-year fixed rate mortgage. My question is: Is it possible that I should have been offered a tracker mortgage when I came off that rate. I don't think I was given the option (need to try and dig out the letter). I'm guessing it might say something somewhere in the initial contract I signed with them when I switched to them. I know they were offering a lot of trackers around that time. Is there anything in particular I should be looking out for? Considering I have been on their variable since that fixed rate finished in 2009 do I have a leg to stand on i.e. can it be addressed retrospectively. Thanks for replies in advance.

killers1

Inkers92 wrote: »

Hi all, I have a query in relation to this topic. I originally took out my mortgage in Jan 2005 with PTSB on an introductory rate. When this was up NIB were offering better rates so I switched to them (2006), taking up a three-year fixed rate mortgage. My question is: Is it possible that I should have been offered a tracker mortgage when I came off that rate. I don't think I was given the option (need to try and dig out the letter). I'm guessing it might say something somewhere in the initial contract I signed with them when I switched to them. I know they were offering a lot of trackers around that time. Is there anything in particular I should be looking out for? Considering I have been on their variable since that fixed rate finished in 2009 do I have a leg to stand on i.e. can it be addressed retrospectively. Thanks for replies in advance.

The only way of knowing is to get your hands on a copy of the original loan offer document which was issued by NIB. You should have been given a copy, your broker will have a copy, the bank will have a copy & your solicitor would also have a copy. If the loan offer states that on the expiry of the fixed rate your loan will revert to a tracker rate then you should get a tracker rate now. If it says your loan will revert to a SVR, you won't, it's as simple as that...

ronan45

seamus wrote: »

You may have misunderstood a little or perhaps it was communicated wrongly. When you go on a fixed rate mortgage, there is still an underlying agreement on which your mortgage is based. When your fixed rate ends, the bank is obliged to offer you the original agreement in addition to any new rates.

So in a lot of cases people would have had a tracker as their "base" rate when they took a fixed term. When the fixed term ended, the bank were contractually obliged to offer the tracker again.
If someone didn't have a tracker mortgage when their fixed term began, the bank doesn't have to offer them a tracker when it ends.

This was the case for a lot of people who took out mortgages in the last five years. Many people opt to fix for the first couple of years to give them stability when they are just getting settled. During the fixed period, the banks stopped offering tracker rates to new customers.
But because these fixed customers had opted for a tracker rate when they started their fixed period, the bank are obliged to offer them the tracker rate when the fixed period ends.
This is what happened to me.

At this point though I imagine most banks will not allow an existing tracker customer to have a fixed period without signing away their tracker rate first.

Seamus Im in Lucyboucys predicament. Took mortgage out 2005 switched to 5 year fixed in 07:rolleyes:. I have some arrears and currently in the MARP Process could they use that as an excuse to say Sorry Mister ! Arrears = No tracker back!
I actually rang Ulster bank and was told by 2 different people that There was not a chance i could get the tracker back I have the same wording as Lucy below. They said I would have to go on the Standard Variable rate. Hopes me dont :cool:

james bond

raglan wrote: »

We were on a tracker before NAIVELY fixing our mortgage, we weren't offered any choices, just that our mortgage would revert to svr when fixed term ended..........and unfortuantely didn't have a clue what the implications of this would mean and that by signing form we would lose tracker. Forwarded complaint to Ombudsman but we lost

Hi raglan,

I have a similar problem - was on a tracker, fixed for 2 years and the fixed rate offer letter only offer a SVR at expiry. No link between the initial tracker offer letter and the fixed rate offer letter. I complained to NIB and they referred me to the Ombudsman but I never followed up.

I assume I am in the same boat as you, however I do not feel that NIB followed the consumer protection code in their dealings with me when I fixed originally. I would love to hear from you if you want to discuss further. I note that your thread was written in November 2011, however I think the sentiments of the Ombudsman have changed since and he is more interested in following legal and regulatory procedures which I do not feel BIN did.

Too much money at stake here from a non-cooperating Bank to just give up on.

Please touch base...........

chris85

james bond wrote: »

Hi raglan,

I have a similar problem - was on a tracker, fixed for 2 years and the fixed rate offer letter only offer a SVR at expiry. No link between the initial tracker offer letter and the fixed rate offer letter. I complained to NIB and they referred me to the Ombudsman but I never followed up.

I assume I am in the same boat as you, however I do not feel that NIB followed the consumer protection code in their dealings with me when I fixed originally. I would love to hear from you if you want to discuss further. I note that your thread was written in November 2011, however I think the sentiments of the Ombudsman have changed since and he is more interested in following legal and regulatory procedures which I do not feel BIN did.

Too much money at stake here from a non-cooperating Bank to just give up on.

Please touch base...........

Have you checked your original mortgage agreement? What does this say?

peteb2

Also bear in mind the consumer protection code may have only changed after your original dealings.