Tracker Mortgage Decision Reference 2024-0145

• Case Outcome: Rejected
• Year: 2024
• Date: 26 June 2024
• Reference: 2024-0145
• Finantial Sector: Banking
• Conducts Complained Of: Failure to offer a tracker rate throughout the life of the mortgage

Decision Ref:

2024-0145

Sector:

Banking

Product / Service:

Tracker Mortgage

Conduct(s) complained of:

Failure to offer a tracker rate throughout the life of

the mortgage

Outcome:

Rejected

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

Background

This complaint relates to a mortgage loan account held by the Complainants with the

Provider. The mortgage loan that is the subject of this complaint was secured on the

Complainants’ residential investment property.

The loan amount was €194,000.00 and the term of the loan was 30 years.

The Complainants’ Case

The Complainants note that they were issued a mortgage loan in July 2005 on a fixed

interest rate of 2.55%.

Prior to the expiry of the 1-year fixed interest rate period in July 2006, the Complainants

submit that the Provider failed to provide them with a list of interest rate options

therefore their mortgage loan account automatically defaulted to a variable interest rate

of 4.10% on 20 July 2006.

The Complainants submit that they wrote to the Provider on 3 August 2006 to query why

they had not received any notice of this rate increase, and to request that the mistake be

rectified. The Complainants detail that they received a response from the Provider on 20

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/Cont’d…

September 2006. The Complainants are of the view that the query outlined in their letter

of 03 August 2006 was never adequately addressed by the Provider.

The Complainants state that the Provider subsequently sent them a letter on 24 October

2006 outlining a number of fixed interest rate options. The Complainants submit that they

opted for a 5-year fixed interest rate of 4.99%, which was applied to the mortgage loan

account on 15 November 2006.

Prior to the expiry of the 5-year fixed interest rate period in November 2011, the

Complainants submit that they received a letter from the Provider setting out the available

interest rate options to include fixed interest rates and an LTV variable rate.

The Complainants submit that they attended one of the Provider’s branches on 11

November 2011 to meet with a representative of the Provider as there was a

disagreement over the correspondence issued by the Provider in 2006. The Complainants

state that they queried why they were not given the option of a tracker interest rate upon

expiry of the fixed interest rate period in 2006. The Complainants note that the Provider

informed them that it had issued a letter to the Complainants twenty days prior to the

expiry of the fixed period in July 2006, offering a range of interest rate options which had

included a tracker interest rate. The Complainants maintain that they never received such

a letter. The Complainants assert that if they had received this letter in 2006, they would

not have had any reason to visit the Provider’s branch in or around July 2006 or to write to

the Provider on 03 August 2006 to query why they did not receive any interest rate

options.

The Complainants submit that they were informed by the Provider that they no longer had

the option of selecting a tracker rate of interest as the Provider had ceased offering tracker

interest rates in 2009. The Complainants are of the view that in circumstances where the

Provider failed to issue the rate options letter in 2006, they “have lost out on the offer of a

Tracker rate and as such are of equal loss.” The Complainants assert that they “would have

requested all options and considered same before being offered the fixed rate letter” and if

a “tracker had been made available, they would have selected same.”

In response to the Provider’s submission that the options letter that was purportedly

issued in late-June 2006 was returned with the notation “not known” as the Complainants

did not live at that address, the Complainants state that they “were collecting post from

this address and that they were in constant contact with the owner of the property at the

time”.

The Complainants state that as they did not complete the rate options form, the mortgage

loan account defaulted to the ‘LTV’ variable rate of 6.05% on 15 November 2011.