Tracker Mortgage Decision Reference 2022-0299

• Case Outcome: Rejected
• Subject Matter: Tracker Mortgage
• Reference: 2022-0299
• Date: 31 August 2022
• Finantial Sector: Banking
• Conducts Complained Of: Refusal to move existing tracker to a new mortgage product

Decision Ref:

2022-0299

Sector:

Banking

Product / Service:

Tracker Mortgage

Conduct(s) complained of:

Refusal to move existing tracker to a new mortgage

product

Outcome:

Rejected

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

Background

This complaint relates to the Complainants’ mortgage loan application for a tracker

portability product with the Provider. At the time of the Complainants’ application, the

First Complainant held a mortgage home loan account ending 3101 with the Provider and

a tracker interest rate applied to the mortgage loan.

The purpose of the Complainants’ mortgage loan application for a tracker portability

product was to purchase a new property in the joint names of the Complainants and

maintain a tracker interest rate on a portion of the mortgage borrowings.

Mortgage loan account ending 3101 was secured against the First Complainant’s

residential investment property and this property was sold in July 2015.

The Complainants’ Case

The First Complainant submits that she had an existing mortgage loan account ending

3101 with the Provider and was availing of a tracker interest rate.

- 2 -

/Cont’d…

The First Complainant explains that she wanted to sell the property in 2014 which was the

subject of her existing mortgage loan ending 3101 and “port” the tracker mortgage to a

new property which she intended to purchase with the Second Complainant.

The Complainants submit that they met with the Provider in or around July 2014 to discuss

what was required of them to avail of the Provider’s tracker portability product for a joint

mortgage on a new property. The Complainants submit that they met with the Provider on

“a few” occasions in relation to their application for a tracker portability product. The

Complainants state that they received approval in principle on 01 July 2014.

The Complainants note that they submitted a joint application for the tracker portability

product in May 2015. The Complainants submit that the application process was lengthy

and “at every turn” the Provider requested additional information and documentation.

They submit that the application process took much longer than they had expected, but

eventually they received verbal approval for the sum of €129,000.00.

The First Complainant states that she sold her existing property in July 2015. The

Complainants explain that the tracker portability product was available for 6 months from

the date of the sale, subject to receiving the letter of approval.

The Complainants submit that they subsequently requested an increased loan amount of

€160,000.00 but the Provider would only offer them a loan amount of €149,000.00. They

submit that in November 2015, they wanted to purchase a property for €170,000.00 and

use other funds to cover the balance. They submit that the Provider assured them that it

would provide “proof of funds” so they could bid for the property at auction, but the

Provider failed to give them the proof of funds in time so they could not make a bid at the

auction.

The Complainants submit that they found another property in January 2016 and the

availability of the portability product was due to expire on 27 January 2016. The

Complainants detail that the Provider informed them that it would be unable to issue the

Letter of Approval by 27 January 2016 and granted them a 1-month extension to avail of

the tracker portability product. The Complainants state that they received the letter of

approval on 29 January 2016, however, they were ultimately unable to complete the

purchase prior to the expiry date of the tracker portability product on 27 February 2016.

At this time, the Complainants state that they were selling an existing property held in the

name of the Second Complainant. The Complainants submit that at a meeting with a

representative of the Provider, the representative accused the Second Complainant of

“lying” to him. The Complainants were subsequently granted a further 1-month extension

to 31 March 2016.

- 3 -

/Cont’d…

The Complainants submit that due to the Provider’s actions, they sold the First

Complainant’s property at a depressed cost, they lost the opportunity to buy a prospective

new home, they have incurred significant costs and they have suffered from stress and

anxiety.

The Complainants are seeking that the Provider compensate them for the value of the

property sold in July 2015, or alternatively, to provide the Complainants with a tracker

portability mortgage plus compensation for all costs and stress incurred.

The Provider’s Case

The Provider states that it does not accept the Complainants’ submissions that its actions

prevented them from availing of its tracker portability product between May 2015 and

March 2016.

The Provider details that the First Complainant had a mortgage for the sum of €79,791.00

under mortgage loan account ending 3101 which was drawn down on 30 May 2006.

The Provider states that the Complainants enquired about the tracker portability product

in July 2014, at which stage mortgage loan account ending 3101 was availing of a tracker

interest rate of ECB + 0.95% and the mortgaged property was being leased to tenants by

the First Complainant.

The Provider details that it launched its tracker portability product in April 2014 and

explains that it was “available for existing home loan customers who have a tracker

mortgage loan account and who plan to sell their existing home and purchase another.”

The Provider states that tracker portability means applying a tracker interest rate which is

1.00% higher than the existing tracker rate to a portion of the new loan which can be no

more than the balance of the existing tracker home loan for the remaining term of that

loan. The Provider details further that the “purchase of the new property is expected to

take place on the same day as the sale of the existing property, but in any event no later

than six months [from] the date of the sale of the existing home. A valid Letter of Approval

in respect of the new home loan(s) must be in place prior to the sale of the existing

property.”

The Provider submits that it issued the Complainants with approval in principle for the

tracker portability proposal on 01 July 2014. The Provider states that this document