Staff Mortgage after redundancy ?

frankie321

Does anyone have any experience of what happens if you're made redundant but have a staff mortgage rate ?

Was it considered in the redundancy package ?

Or did you get to keep the rate ?

Jim2007

There is not generic answer to this, you need to read the terms and conditions of the mortgage, your employment agreement and any redundancy agreement. I have seen all three out comes:

• Rate retained as part of the redundancy agreement
• Rate changed to current commercial rate
• Loan crystallised on termination and payable on demand

frankie321

I've had a good dig around but can't find original staff mortgage conditions - PTSB around 2005. (Don't suppose anyone reading would have details from theirs ?)

The company I'm leaving has been "twice removed" from the bank due to being sold - would this have a bearing as to the likelihood of any of the three options ?

If option 1 would that just have to be agreed with the company I'm leaving or would the bank need to be involved too ?

Jim2007

Sorry but we have know way of being able to answer your questions - we don't know you, the company or the agreements between the company and the bank. Even if we did you can't provide us with the details of your mortgage... and if someone was to respond, you have no idea if they know what they are talking about or even if they are talking about the same thing!

For details your mortgage you could try and ask the solicitor who acted for you if they have a copy or else just ask the bank see if they can provide you with a fresh copy. And going forward you need to improve your record keeping because you never know when you may need to refer back to such documents, even after the load is paid down.

Concerning your second question - no idea. That would entire depend on what they planned for. The only thing that might give you a hint is knowledge of what they did in the past.

And again, as for option 1, it depends on who is carrying the cost of the reduced rate and the legal agreements put in place - so you need your mortgage documents to even kick this one off.

frankie321

Thank you very much for the information.

I guess I was after general "how do staff mortgages generally work?" information which you have generously supplied.

And that's a very valid point on the record keeping !

thebiglad

Have you put the question to HR person dealing with your redundancy? This must be on your staff file too, if the mortgage is going to transfer to different terms then obviously someone will have notify the financial institution so, there will need to be a trigger to do this and, a point of contact for them.

They should be able to assist you, in addition to Solicitor option etc.

phormium

I worked in banking for years and there were many rounds of redundancies during that time, each was slightly different to previous offerings and usually it was up to the union to negotiate the best deal for staff. As regards staff mortgage rates which was 3% for a very long time some packages allowed for that to continue after leaving for 5 yrs, then rates dropped and most staff opted out of the staff rate as the customer rate was cheaper! Now that they have risen again a staff rate could be attractive but if there is a redundancy package on offer it should be spelled out there what happens. If there is no union to negotiate on your behalf then I imagine you'll have to have a go yourself!

I took the redundancy finally and there has been 3 more rounds of it since then, all different in their offerings, I luckily got the best one! When I took it I had already switched to customer mortgage rate so it didn't matter about the preferential rates.

frankie321

https://www.boards.ie/discussion/comment/121879398#Comment_121879398

That's the thing ... I feel like if I say it to HR then they'll be forced into taking some sort of action and I'm guessing the answer from the financial institution side will most likely be to kill the staff rate (as it's likely the path of least resistance)

But I had hoped that there would be a chance that not bringing it up would allow me to keep the rate ? But I guess if it's on a "staff file" then the staff mortgage is unlikely to be missed ?

Also, how could a solicitor be of help ?

phormium

Are you in a union?

frankie321

Yes I'm in a union. But the latest company owners are running down numbers in the Irish office and may even close here altogether. So not a great bargaining position.

There have been multiple rounds of redundancies, and the union have gotten some concessions - but I'm the only one so far who has had a staff mortgage so not much upside in HR putting in the effort on this for one person (HR are VERY understaffed recently by company policy)

thebiglad

https://www.boards.ie/discussion/comment/121880937#Comment_121880937

The Solicitor who did your property conveyancing may have copy of the terms of the original offer?

Its a long shot but, its surely on the original mortgage terms so, you need to get hold of those without going to the financial institution.

Yes, if you're now an outlier, there is surely a chance it will be missed if you are made redundant but, likewise there'll be a remaining risk that it could be identified at any time and, perhaps the terms are not so onerous in the event of redundancy and you would be ok.

Jim2007

https://www.boards.ie/discussion/comment/121880937#Comment_121880937

Sooner or later this is going to have to be sorted out. And time may not be on your side as there is usually more motivation to keep a current employee on side until the end than someone how has already left. On top of which a commercial rate applied retrospectively could prove to be very expensive for you.

And we were not talking about "a" solicitor, but rather "the" solicitor you actually used when you bought the house, in the hope they at least can supply you with a copy of the documentation and perhaps a legal opinion on the best approach to dealing with it.

Jonathan2712

I had a staff mortgage years ago (this was in the UK but probably works the same way). In theory as soon as you left the bank the rate was supposed to switch to the standard variable rate. However it took six years and two further job moves before they got around to it, they only eventually changed it when my current job asked for a reference and they connected the dots. Out of the dozen or so people I worked with who had the staff mortgages none of them had them taken away within the first few years.

As a side note, in the UK you pay Benefit in Kind (BIK) tax on a staff mortgage as an employee, but once you no longer work there it no longer counts as a staff benefit, so I had six years of interest free tax free mortgage payments!

Jonathan2712

Just to add, when they did change the rate there was no back dating of interest. The delay was there issue not my issue.