Tracker Mortgage Decision Reference 2021-0367

• Case Outcome: Rejected
• Reference: 2021-0367
• Date: 13 October 2021
• Year: 2021
• Subject Matter: Tracker Mortgage
• Conducts Complained Of: Failure to offer a tracker rate at point of sale,Failure to offer a tracker rate throughout the life of the mortgage
• Finantial Sector: Banking

Decision Ref:

2021-0367

Sector:

Banking

Product / Service:

Tracker Mortgage

Conduct(s) complained of:

Failure to offer a tracker rate at point of sale

Failure to offer a tracker rate throughout the life of

the mortgage

Outcome:

Rejected

LEGALLY BINDING DECISION

OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

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

Provider. The mortgage loan was secured on the Complainants’ residential investment

property.

The loan amount was €189,000 and the term of the loan was for 25 years. The particulars

of the Amended Letter of Offer dated 30 March 2005 provided for a 12-month fixed

interest rate of 3.09% with the Provider’s prevailing variable interest rate to apply

thereafter. The mortgage loan account was drawn down on 12 July 2005.

The Complainants’ Case

The Complainants explain that they applied for a mortgage loan account with the Provider,

through a third-party broker, and received a loan offer letter from the Provider in March

2005 for a loan in the amount of €189,000. The Complainants submit that the interest rate

was fixed for an initial 12- month period at 3.09% with a variable rate of interest to apply

thereafter.

- 2 -

/Cont’d…

The Complainants state that on the expiry of the 12-month fixed interest rate period in

July 2006, the mortgage loan account rolled on to a “variable rate” and remained on this

rate from July 2006 until September 2006. The Complainants submit that they are of the

view that the variable rate that applied in July 2006 was a tracker interest rate of “1.5%

over the ecb rate”.

The Complainants maintain that the interest rate that applied in July 2006 could not have

been a standard variable rate as they had “not even heard of” a standard variable rate at

this time and further there “was no mention of a svr in [their] loan agreement or any

written communication from [the Provider] or in terminology or options both privately or

public i.e. newspapers tv.”

The Complainants contend that they never received a letter dated 02 May 2006 titled

“Advance Rate Rollover Letter” from the Provider. The Complainants also submit that they

did not receive the “Fixed Rate Instructions Form” which contained four fixed interest rate

options. Rather, they submit that they received a rate instructions form which also

contained the option for a 3-year “capped” tracker interest rate.

The Complainants further submit that a letter issued to all third-party brokers in 2006

which stated that all “Fixed rates would roll onto Trackers at end of fixed rate period”.

The Complainants submit that they received “unsolicited fixed rate forms from [the

Provider] in Aug, Sept, and Oct in 2006. [The Complainants] signed the Aug document after

some research and ticked the 3 year capped tracker, this document is gone missing from

[their] file”. The Complainants submit that the subsequent rate option letters that they

received from the Provider from August to October 2006, only contained fixed interest

rate options and did not contain the “capped tracker rates offer” which they submit they

had already accepted.

The Complainants state that all interest rate changes to their mortgage loan account in

2006 and 2008 were in response to “the ECB rate change” and the Complainants note that

this was also stated in a letter they received. The Complainants submit that this led them

to understand that the interest rate applicable to their mortgage loan account was “linked

to the ECB rate”.

The Complainants explain that they requested a tracker interest rate to be applied to their

mortgage loan account in August 2008, however they state that the Provider refused to

apply a tracker rate because tracker rates were not available for mortgages secured on

investment properties.