Tracker Mortgage Decision Reference 2021-0372

• Case Outcome: Rejected
• Reference: 2021-0372
• Date: 18 October 2021
• Year: 2021
• Subject Matter: Tracker Mortgage
• Conducts Complained Of: Failure to offer a tracker rate at point of sale
• Finantial Sector: Banking

Decision Ref:

2021-0372

Sector:

Banking

Product / Service:

Tracker Mortgage

Conduct(s) complained of:

Failure to offer a tracker rate at point of sale

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 is secured on the Complainants’ principal private residence.

The loan amount was €250,000 and the term of the loan was for 25 years. The particulars

of the Mortgage Loan Offer Letter dated 28 May 2008 provided for a 12-month discounted

variable interest rate of 4.94%, with the Provider’s “then prevailing Home Loan variable

rate” to apply thereafter. The mortgage loan account was drawn down in August 2008.

The Complainants’ Case

The Complainants detail that when they applied for a mortgage loan with the Provider on

28 May 2008, they were never advised that they had the option of choosing a tracker rate

of interest. They contend that a variable rate of interest “was our only offer”.

The Complainants maintain that “at no time” were they offered a tracker interest rate or

indeed “advised on what a Tracker Mortgage was” when they applied for their mortgage

loan in 2008. The Complainants contend that had they been made aware of a tracker

interest rate option, they would have availed of such a rate at that time as they were

getting married, trying to build their home, and both of them had just commenced full-

time employment therefore “every penny saved would have been advantageous to them

at the time”.

- 2 -

/Cont’d…

The Complainants submit that they sought the “best available option” from the Provider at

that time however they were not offered a tracker mortgage which they now understand

was the “best available option…which would have given a lesser interest rate for the

duration of [their] mortgage”. The Complainants assert that they were “not in the business

of selling mortgages” therefore “[t]hey placed their faith and their trust in [Provider] and

their personnel in advising on the best available options to them”.

The Complainants further detail that they were never provided with a mortgage form of

authorisation from the Provider to “convert” their variable interest rate mortgage to a

tracker interest rate, nor were they informed that this option was available to them.

The Complainants disagree with the Provider’s assertion that the Complainants “exercised

their discretion in selecting an interest rate and accepting the terms and conditions

applicable to the relevant interest rate when they signed and accepted the offer letter”.

The Complainants maintain that they “did not exercise discretion and could not do so, if

they were not given all the options”.

The Complainants submit that in 2017 “there was a lot of talk in the media surrounding

issues in relation to Tracker Mortgages” and therefore they received a copy of their loan

pack “in order to make sure that they were on the tracker rate and then realised they were

not”.

The Complainants stated that they want to know if they are entitled to a tracker interest

rate, and if so, whether any monies are owed to them.

The Provider’s Case

The Provider submits that the Complainants signed a Mortgage Loan Offer Letter dated 28

May 2008 on 12 June 2008 and drew down mortgage loan account ending 3867 in August

2008 for a term of 25 years. The Provider explains that a discounted standard variable

interest rate of 4.94% applied to the Complainants’ mortgage loan account for a period of

12 months, “after which the interest rate would move to a standard variable interest rate”.

The Provider asserts that there was no contractual entitlement to a tracker rate of interest

in the Mortgage Loan Offer Letter that issued to the Complainants.

The Provider states that tracker interest rates were available to new and existing

customers at the time of the Complainants’ mortgage loan application in May 2008. The

Provider submits that the Complainants “could have requested that the Offer Letter was

reissued with a tracker rate of interest” at any time prior to drawdown, however they did

not do so. In addition, the Provider states that post drawdown “the Complainants could

have opted to switch the mortgage loan account to a tracker rate of interest”.