Tracker Mortgage Decision Reference 2022-0136

Case OutcomeRejected
Subject MatterTracker Mortgage
Reference2022-0136
Date21 April 2022
Finantial SectorBanking
Conducts Complained OfFailure to offer a tracker rate throughout the life of the mortgage
Decision Ref:
2022-0136
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 mortgage loan accounts held by the Complainants with the
Provider. The mortgage loans which are the subject of this complaint were secured on the
Complainants’ private dwelling house.
The Second Complainant drew down mortgage loan account ending 7404 with the
Provider on 15 September 2006. The loan amount was for the sum of €214,000 and the
term of the loan was 23 years and 1 month. The Housing Loan Agreement dated 25 July
2006 detailed that the interest rate applicable to the loan was a fixed interest rate of
3.95% that would apply until 1 June 2009. Mortgage loan account ending 7404 moved to
the Provider’s standard variable interest rate on the expiry of the initial fixed interest rate
period. The Second Complainant subsequently requested the Provider to apply a further
fixed interest rate to the mortgage loan account in September 2010. However, in order to
facilitate this request, the Second Complainant had to redeem mortgage loan account
ending 7404 and draw down a new mortgage loan on the new fixed interest rate.
In September 2010, the Complainants drew down mortgage loan account ending 9048 in
their joint names on foot of a request for a fixed interest. The loan amount was for the
sum of €190,000 and the term of the loan was 19 years. The Housing Loan Agreement
dated 7 September 2010 detailed that the interest rate applicable to the loan was a fixed
interest rate of 3.99% that would apply until 1 October 2013. Mortgage loan account
ending 9048 was secured on the same mortgaged property the subject of mortgage loan
account ending 7404.
- 2 -
/Cont’d…
The loan monies from the Complainants’ mortgage loan account ending 9048 were
subsequently used to repay the outstanding balance on the Second Complainant’s
mortgage loan account ending 7404 and mortgage loan account ending 7404 was
redeemed in full on 9 September 2010.
Mortgage loan account ending 9048 which is in the joint names of the Complainants is the
subject of this complaint.
The Complainants’ Case
The Complainants explain that they held the following two mortgage loan accounts with
the Provider:
- Mortgage loan account ending 9048 which was drawn down in their joint names
on 9 September 2010 and the loan monies of which were used to redeem
mortgage loan account ending 7404 which was held in the name of the Second
Complainant and was originally drawn down on 15 September 2006; and
- Mortgage loan account ending 6809 which was drawn down in their joint names
on 18 August 2008 in the amount of €180,000 on a tracker interest rate.
In August 2008, the Complainants submit that they attended a meeting at a branch of the
Provider where they were informed by a representative of the Provider that on the expiry
of the fixed interest rate period in respect of mortgage loan account ending 7404 in June
2009, the mortgage loan would “be transferred to the tracker mortgage”.
The Complainants detail that, they “were led to believe” that a tracker interest rate would
apply “automatically” to mortgage loan account ending 7404 on the expiry of the fixed
interest rate in June 2009. The Complainants state that they were “not at any stage, prior
to the cessation of [the] fixed term mortgage, advised that there would be an issue moving
the mortgage to the tracker rate.” The Complainants contend that it was because of the
advice and instruction” received from the Provider’s representative that they did not
“cease the fixed term at the time and transfer to the tracker rate mortgage”.
On the expiry of the fixed interest rate period in June 2009, the Complainants maintain
that mortgage loan account ending 7404 did not roll on to a tracker interest rate as they
were advised”, and instead rolled on to the Provider’s standard variable interest rate. The
Complainants detail that they found this hard to understand as they had “the second
mortgage on a tracker rate and [an employee of the Provider] had assured [the
Complainants] that it would transfer automatically.”

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