Tracker Mortgage Decision Reference 2022-0142

• Case Outcome: Rejected
• Subject Matter: Tracker Mortgage
• Reference: 2022-0142
• Date: 22 April 2022
• Finantial Sector: Banking
• Conducts Complained Of: Failure to offer a tracker rate throughout the life of the mortgage

Decision Ref:

2022-0142

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

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

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

Complainant’s principal private residence.

The loan amount was €300,000.00 and the term of the loan was 35 years. The Mortgage

Loan Offer Letter dated 14 July 2006 detailed that mortgage loan would “issue in stages”

and commence on a discounted interest rate of ECB +0.85% for the first 12 months with an

interest rate of ECB +1.25% applying thereafter.

The Complainant’s Case

The Complainant submits that he “signed/entered into a ‘Tracker’ Mortgage Agreement in

good faith with [the Provider] in 2006 for €300,000 on certain terms and conditions.” The

Complainant details that the mortgage was “activated with a drawdown of €103,500 in

2006”.

The Complainant contends that “Due to personal & economical circumstances in Ireland

[he] had to pause construction on [his] house until 2016 and when [he] went to drawdown

the next part of the balance [he] was informed that [he] could not & that [he] would have

to take out a ‘Standard Rate Variable’ 2nd mortgage with very different terms and

conditions.”

- 2 -

/Cont’d…

The Complainant states that the Provider “refused to allow [him] to drawdown [his] tracker

mortgage and insisted [he] re-apply and take out a standard variable rate mortgage for the

balance of [his] mortgage to finish the build of [his] house.”

The Complainant maintains that the Provider has “offered the explanation that [he] did not

draw down the full mortgage within 6 months” but the Complainant insists that this would

be “impossible for a self build house.” The Complainant asserts that “At no stage was [he]

ever contacted or informed by [the Provider] that [he] was not complying with the terms

and conditions or that [he] was running out of time to drawdown the balance of the

mortgage”.

The Complainant details that “Nowhere in the Terms & Conditions was it stated that 100%

of the mortgage must be drawn down within any timeframe.” The Complainant submits

that if the Provider had notified him that he was “in danger of losing [his] Tracker

Mortgage, [he] would have immediately have progressed [his] house build and drawn

down the balance of the Tracker Mortgage”. The Complainant further submits that “Surely,

there is an onus/responsibility on the provider to contact/warn a loyal Customer of over 20

years on such a serious issue?”

The Complainant asserts that it is “quite obvious that the only reason to insist on a new

variable rate mortgage is to renege on the original tracker mortgage agreement.” The

Complainant further asserts that “This has forced [him] to have two separate mortgages

on the same property – one a ‘Tracker’ and another at ‘Variable Rate’.”

The Complainant states that his “contention is that the ‘Provider’ in 2016 just saw this as

an opportunity to unilaterally cancel [his] tracker mortgage and force [him] to take out a

2nd higher interest rate mortgage.”

The Complainant submitted that in an effort “to try and alleviate the financial pressure” he

has been forced to “secure a private loan (€65,000 interest free) to pay back a lump sum

off the mortgage and renegotiate a new loan with [the Provider] at 2.9% for the balance.”

The Complainant asserts that for the Provider “[t]o try and suggest that the 2nd. Mortgage

which [the Complainant] was ‘forced’ to take out because the Provider reneged on the

original Mortgage to complete the building on [the Complainant’s] house is not relevant to

the complaint is ludicrous.”

The Complainant details that “The 2nd. Mortgage only exists because of [the Provider’s]

behaviour in refusing to allow [the Complainant] to draw down the balance of the 1st.

Mortgage, that is the kernel of the complaint.”