Tracker Mortgage Decision Reference 2022-0115

• Case Outcome: Rejected
• Reference: 2022-0115
• Date: 30 March 2022
• Year: 2022
• Subject Matter: Tracker Mortgage
• Finantial Sector: Banking
• Conducts Complained Of: Failure to offer a tracker rate throughout the life of the mortgage

Decision Ref:

2022-0115

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

The complaint relates to three mortgage loan accounts held by the Complainants with the

Provider. The mortgage loan accounts which are the subject of this complaint were

secured on the Complainants’ private dwelling house.

• A Facility Letter dated 21 July 2005 for mortgage account ending 6824 provided for

a loan in the amount of €200,000.00, repayable over a term of 19 years on a

tracker interest rate of 2.80% (ECB + 0.79%).

• A second Facility Letter dated 5 July 2007 for mortgage account ending 3834

provided for a loan in the amount of €187,572.00, repayable over a term of 17

years and 3 months and commencing on a 3-year fixed interest rate of 4.85%.

• A third facility letter dated 4 August 2010 for mortgage account ending 1078

provided for a loan in the amount of €164,030.00, repayable over a term of 14

years and 3 months on a tracker interest rate of 1.54% (ECB + 0.54%). Mortgage

loan account ending 1078 was transferred to a third-party provider in December

2017.

- 2 -

/Cont’d…

The Complainants’ Case

The Complainants state that they drew down a mortgage loan with the Provider on a

tracker interest rate in 2005. In 2007, the Complainants submit that they approached the

Provider as they were having “financial problems”. The Complainants detail that they were

advised by the Provider to “switch to a fixed rate mortgage from a tracker mortgage”. The

Complainants submit that following this advice, they transferred their mortgage loan

account from a tracker interest rate to a fixed interest rate.

The Complainants state that documents that were signed by them at the time of switching

from the original tracker interest rate to a fixed interest rate in 2007, are dated incorrectly

and were not witnessed.

The Complainants submit that “the tracker rates then dropped” and the Complainants

assert that they were paying approximately €300 more per month on mortgage

repayments than they would have been had they remained on the tracker interest rate. In

2008, the Second Complainant lost his job, and the Complainants submit that they asked

the Provider if they could “reduce the payments” on their mortgage loan account.

The Complainants submit that they asked the Provider whether the Second Complainant’s

income protection insurance “would cover some of the repayments” but the Provider

informed them that given that the First Complainant was still employed, they were not

entitled to “any help even though [the Complainants] had an insurance policy with [the

Provider]”.

The Complainants contend that they “pleaded” with the Provider “on numerous occasions

to get released from the fixed rate mortgage agreement” but submit that the Provider

informed them that this was not possible as the Complainants would “have to pay a

breakage fee in excess of €7,000”.

In August 2010, the Complainants detail that their mortgage loan account reverted to the

tracker interest rate, however, the Complainants explain that in the interim, they began to

use credit cards and borrow money in order to “survive and pay the mortgage” which led

to them “spiralling into excessive debt”. The Complainants state that this situation caused

their health to suffer.

The Complainants submit that they fear that they will never have their “credit rating

restored”. The Complainants’ “biggest concern” is that they “won’t be able to afford” to

finance their children going to college. The Complainants detail that they are considering

selling their family home.