Wrong Mortgage Rate?

Fishyfreak · 12-10-2020 8:20am #1

Hi,

Last year I renewed my fixed rate for another year. I sent in my letter in October asking to be placed on 1 year fixed from the renewal date of 1st December. No rate was specified but at the time it was 3.0%.

In the meantime, November 13th the rate was reduced to 2.95%.

When my fixed term renewed on 1st December I was placed on the old rate of 3.0%.

Can the bank do this? The rate of 3.0% didn't exist anymore on 1st December. They are claiming that they use the rate in effect on the date I signed. Seems very unfair.

Any and all advice would be greatly appreciated.

ted1 · 12-10-2020 8:23am

Seems very fair. It’s a fixed rate. You agreed on that rate. Had the rate increased you’d be pretty pissed that they didn’t give you the fixed rate that you agreed to.

Fishyfreak · 12-10-2020 8:32am

ted1 wrote: »

Seems very fair. It’s a fixed rate. You agreed on that rate. Had the rate increased you’d be pretty pissed that they didn’t give you the fixed rate that you agreed to.

I didn't agree on that specific rate. The tick box was "1 year fixed rate", no mention of the rate.

If the rate increased I have no doubt in my mind I'd be placed on the new rate.

Snotty · 12-10-2020 9:06am

Fishyfreak wrote: »

If the rate increased I have no doubt in my mind I'd be placed on the new rate.

Yes and you'd be mad that they didn't put you on the rate that was advertised when you signed up for it, is that the very point you are arguing for

You choose to avail for an advertised rate, selecting a point in the future for that rate to start, why would you think the rate would fluctuate between agreement and commencement?

Fishyfreak · 12-10-2020 9:14am

Snotty wrote: »

Yes and you'd be mad that they didn't put you on the rate that was advertised when you signed up for it, is that the very point you are arguing for

You choose to avail for an advertised rate, selecting a point in the future for that rate to start, why would you think the rate would fluctuate between agreement and commencement?

If they placed my on the rate in effect on 1st December I'd happily accept that. The commencement of the new rate is 1st December. It's the Bank who have fluctuated. They don't have a rate written on their renewal form and I haven't specified a rate either.

Snotty · 12-10-2020 11:49am

Fishyfreak wrote: »

If they placed my on the rate in effect on 1st December I'd happily accept that. The commencement of the new rate is 1st December. It's the Bank who have fluctuated. They don't have a rate written on their renewal form and I haven't specified a rate either.

You are on the rate that you signed up for, you timed it badly, which is down to luck and on this occasion you lost out, get over it.

Jim2007 · 12-10-2020 12:01pm

Fishyfreak wrote: »

If they placed my on the rate in effect on 1st December I'd happily accept that. The commencement of the new rate is 1st December. It's the Bank who have fluctuated. They don't have a rate written on their renewal form and I haven't specified a rate either.

I expect you will find that you agreed to the prevailing fixed rate at the time. Read the terms and conditions of the loan and the general terms and conditions of the bank.

dubrov · 12-10-2020 12:07pm

When did you sign the contract, October or December?

Fishyfreak · 12-10-2020 12:33pm

dubrov wrote: »

When did you sign the contract, October or December?

October.

Sounds like I just have to take this one on the chin. Thanks to all for the input.

Trish56 · 12-10-2020 1:10pm

I think you are right and I would pursue it with the bank. If your existing fixed rate expired on the 1st December and the fixed rate to fix again for 1 year at 1st December was 2.95% that is the rate that you should be on.

Many people get approved for a mortgage at one rate however when they drawdown it is the rate on the date of drawdown that they pay and this should be no different. As you said there was no rate specified on the letter.

If they refuse to honor the rate then you need to send a letter of complaint to the bank.

Snotty · 12-10-2020 2:36pm

While i dont think the OP has any argument that will stand up, it does throw up some interesting questions, like how far in advanced can i sign up for a fixed rate?
Say i am in my first year of a 3 year fixed rated, could i send a letter saying that I want to move to their current 5 year fixed rate when my current rate ends in October 2022?

jimmycrackcorm · 12-10-2020 2:42pm

Fishyfreak wrote: »

I didn't agree on that specific rate. The tick box was "1 year fixed rate", no mention of the rate.

If the rate increased I have no doubt in my mind I'd be placed on the new rate.

If there was no mention of the actual rate on the form then you should contact the bank and say you ticked the one year fixed rate which was 2.95% instead of 3% upon renewal.

Banks have to treat customers fairly, that's why they got penalised over the trackers.

phormium · 12-10-2020 3:30pm

I'd be inclined to think too you should have got the rate at the date of fixing at new deal, usually for drawdowns anyway it is the rate on the day of drawdown you get regardless of what loan offer you signed. Years ago banks used to offer a 'holding' of the rate for a fee, €100 if I remember rightly but that disappeared and in my experience I always made clear to customers that the rate was whatever applied on the drawdown date.

Jim2007 · 12-10-2020 4:17pm

jimmycrackcorm wrote: »

Banks have to treat customers fairly, that's why they got penalised over the trackers.

There is no obligation on the banks or another business for that matter to treat customers fairly that is why we have consumer laws. Penalties arising from the tracker scandal were because people broke the law.

Until the OP sits down and reads the terms and conditions relating to his loan, we have no idea what he signed up to.

We have had a few of these kind of posts now in recent weeks and I hope people are leaning the lesson - Always, always make sure you understand the commitments you are making because the financial consequences can be significant.

If you don't understand something press the pause button and have it explained to you, never just assume something. You are not expected to be a financial or legal expert, but you are expected to be able to act in your own best interests and you should not be in way embarrassed to ask for explanations and make sure you know what is happening - it's your right and your duty.

To my mind the only time you really need to be embarrassed is when you have to admit that you did not bother to act in your own best interests....

ted1 · 12-10-2020 4:38pm

Fishyfreak wrote: »

If they placed my on the rate in effect on 1st December I'd happily accept that. The commencement of the new rate is 1st December. It's the Bank who have fluctuated. They don't have a rate written on their renewal form and I haven't specified a rate either.

That’d be a variable rate. A fixed rate is a fixed rate. You would have agreed a rate and dated the contract when you signed it

RachelsCousin · 12-10-2020 8:55pm

I'm assuming based on dates you're talking about EBS?
Here's the language on the rate form you signed.

"The interest rate you have selected may change between the time you complete this application form and the time we process it.
The interest rate applicable at the time we process the application form will be applied to the loan."

Wrong Mortgage Rate?

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