AIB reassures tracker mortgage customers over repayments

They made a deal with Ulster bank with regards to the payments and the mortgage, the person who took the mortgage out had no say in the transfer of their mortgage now the figure is different to what Ulster bank sold AIB on. In my opinion and I reckon there will be some legal cases taken out but AIB will have to honor what they signed up for its not the individuals fault that UB made an b0ll0x of the figures and its not their fault that AIB did not do their due diligence when signing up for the mortgages portfolio all they seen was profit so they should take their share of the burden for being greedy little pigs and not going through the figures properly.

I am one of the customers affected. Mortgage balance ca. 8k. Monthly repayment currently €501.04. Before the last 0.25% increase it was €500.04, so a 0.25% increase led to a €1 increase. So I was more than a little shocked to see AIB wanting the same 0.25% increase to drive my repayment up to €554, a 54 fold increase over UB! My UB/AIB mortgage is as vanilla as it gets...never once missed a payment, never once overpaid it.

In comparison I have a far more complicated mortgage linked to a savings account product from my German building society. It has recently been converted to a simple annuity mortgage and despite the complexity (including clawed back tax relief on the savings account because it ran for less than 7 years) it all balances correctly to the cent. I have a table of repayments that shows exactly how much interest and capital I will repay every month for the next 9 years on the annuity mortgage. That is standard practice here. I have a fixed rate of 3% for 10 years but I can overpay 5% of the original loan amount per calendar year if I wish. A new repayment schedule showing the shortened term will be issued on demand but you can just use an online amortisation tool to show you the same table.

Irish banks seem to make mistakes alarmingly often. They probably invest far too little in automation and leave more of this stuff in the hands of humans.

Yeah I am not going to make claims for the entire German banking sector, especially not for the oversight given the wirecard debacle but I still hold firm to the belief that German banks are (in their day to day operations) more competent than Irish banks. YMMV. The AIB issue is a clear mistake on their end Jim. The outstanding balance on the UB/AIB mortgage will be cleared exactly as predicted by Ulster Bank according to my own calculations.

Have you seen the letter in question? It makes no mention of a mistake by Ulster Bank causing our repayments to jump or any changes to the terms. It is a standard ECB rate increase letter, except that the increase (in my case) is just over 54 times what it should be in absolute terms. It's "only" €53 a month in my case because that mortgage is almost mature but for some others it was hundreds of Euro more, with zero explanation as to why their repayments were suddenly to jump by very significant amounts, amounts that could put some people underwater.

When people called AIB about this they were ready for the question and the answer was that UB had messed up calculating the repayment schedule for years. That answer must have been sanctioned at a very high level within AIB. I do not for one second believe that some mid level customer services manager decided to blame another bank for this. Nobody that low down would put their neck on the block like that. AIB persisted with this excuse (lie) until people contacted the press (perhaps AIB inadvertently caught some journalists with this) and within 3 hours of the article appearing in the Independent AIB had "clarified" the situation on their website and claimed that the repayments would not be changing after all.

The fishiest thing is that this anomaly seems to have only affected a subset of the mortgages (including ones like mine that have never had a missed or over payment) and many reports online suggest it's mortgages that are maturing sooner rather than later, so the sums are mostly "small beer". This is a world where VW and Tesla manipulate their software to defraud customers of such "small beer". I can certainly believe that AIB (given their history) may not have simply made an honest mistake here, but for the moment I will give them the benefit of the doubt on that. By all accounts AIB are somewhat overwhelmned by the workload and Mars Capital are being contracted out to help. Some people are reporting that their now AIB mortgage DDs are being taken by Mars Capital and not AIB. AIB says that they will be taking the DDs themselves in the near future. It's possible that Mars Capital has correctly worked out the repayments and AIB itself has not. I expect a CB investigation into this farce at the very least, so we find out exactly what happened. If it wasn't for a newspaper article, AIB would still be persisting with this nonsense.