Tracker Mortgage Decision Reference 2022-0420

• Case Outcome: Rejected
• Subject Matter: Tracker Mortgage
• Reference: 2022-0420
• Date: 19 December 2022
• Finantial Sector: Banking
• Conducts Complained Of: Refusal to move existing tracker to a new mortgage product

Decision Ref:

2022-0420

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 a mortgage loan account held by the Complainants with the

Provider. The mortgage loan account which is the subject of the complaint is secured on

the Complainants’ private dwelling house.

The First Complainant previously held a mortgage loan under mortgage loan account

ending 8007 in his sole name with the Provider which he drew down in 2006. Mortgage

loan account ending 8007 operated on a tracker interest rate of ECB + 1.10% before it was

redeemed in September 2014.

The Complainants applied for a new mortgage loan with the Provider in their joint names

in May 2014. The loan type offered to the Complainants in the Letter of Approval dated 10

July 2014 is described as “Tracker Homeloan ECB + 2.10%”. Mortgage loan account ending

3458 was drawn down on 24 September 2014 in the amount of €247,193.12 for a term of

28 years on a tracker rate of interest. It is this mortgage loan account that is the subject of

this complaint.

The Complainants’ Case

- 2 -

/Cont’d…

The Complainants submit that they previously held a mortgage loan with the Provider that

was operating on a tracker interest rate of ECB + 1.10% and which was secured on the

Complainants’ private dwelling house.

The Complainants explain that they purchased a new private dwelling house in 2014. The

Complainants submit that they requested that their tracker rate of ECB + 1.10% remain in

place. In this regard, the Complainants state that “Although [they] moved house [their]

mortgage is still the same mortgage…the [Provider] just moved the security from one

property to another.”

The Complainants detail however that they were issued with a new loan offer letter for

mortgage loan account ending 3458 on 10 July 2014, which provided for a tracker rate of

ECB + 2.10%. The Complainants detail that they were given “no choice” by the Provider but

to move to a more expensive tracker interest rate.

The Complainants state that if the tracker interest rate had been “left unchanged” then

their “repayments would have been €4,158 less to date and the balance outstanding on

this tracker mortgage would be reduced by €3,211.”

The Complainants are seeking the following:

(a) That the Provider restores their mortgage loan account to the tracker interest rate

of ECB + 1.10%; and

(b) That the Provider refunds the Complainants for the additional interest charged on

their mortgage loan account, from September 2014 to present.

The Provider’s Case

The Provider submits that the First Complainant drew down a mortgage loan under

mortgage loan account ending 8007 on 14 November 2006. The Provider details that the

mortgage loan was for the sum of €280,000.00 repayable over a term of 35 years on a

tracker interest rate of ECB + 1.10%.

The Provider states that a new lending product was launched in spring 2014 which

“enabled an existing customer of the Bank to sell an existing property held as mortgage

security by the Bank for an existing tracker rate loan; acquire a replacement property with

a new mortgage loan; and have a new tracker rate applied to that part of the new loan

amount which was equivalent to the redemption amount of the previous loan.”

The Provider states that the “new tracker rate offered was the existing tracker rate plus an

additional 1%”. The Provider submits that a tracker portability booklet “was provided to all