Tracker Mortgage Decision Reference 2022-0136

• Case Outcome: Rejected
• Reference: 2022-0136
• Date: 21 April 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:

2022-0136

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.”