Tracker Mortgage Decision Reference 2023-0009

• Case Outcome: Rejected
• Reference: 2023-0009
• Date: 23 January 2023
• Year: 2023
• Subject Matter: Tracker Mortgage
• Finantial Sector: Banking
• Conducts Complained Of: Failure to offer a tracker rate at point of sale,Failure to offer a tracker rate throughout the life of the mortgage

Decision Ref:

2023-0009

Sector:

Banking

Product / Service:

Tracker Mortgage

Conduct(s) complained of:

Failure to offer a tracker rate at point of sale

Failure to offer a tracker rate throughout the life of

the mortgage

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 that is the subject of this complaint was secured on the

Complainants’ principal private residence.

The loan amount was for €182,000.00 and the term of the loan was 30 years. The

Mortgage Loan Offer dated 25 September 2007 provided for a staff preferential variable

interest rate of 4 % which would apply for the term of the loan.

The Complainants’ Case

The Complainants state that in November 2007, they approached the Provider for the

purposes of transferring their mortgage from another financial services provider to the

Provider in order to avail of the Provider’s “Fixed Rate mortgage”. The Second

Complainant was a staff member of the Provider at this time and Complainants detail that

they were advised by the Provider to “avail of a Preferential Staff Rate of 4% (0.89% lower

than the tracker).” The Complainants maintain that their advisor recommended that they

could “do this up to a certain value”. The Complainants outline that this resulted in 50% of

their mortgage, i.e., mortgage loan account ending 4582, “availing of a 3yr fixed rate that

then reverted to a tracker rate when the fixed term ended, and the other 50% [account

ending 3467] on a staff preferential variable.”

- 2 -

/Cont’d…

The Complainants submit that there has been a “lack of transparency” on the part of the

Provider regarding mortgage rates and options. The Complainants maintain that the

Provider recommended that they avail of a staff preferential rate which was “withdrawn

after 11 months resulting in a transfer to a variable rate”. The Complainants assert that

there was no option to avail of a tracker interest rate when the preferential rate was

removed which would “align with other 50% of mortgage”. The Complainants submit that

if the Second Complainant had not been an employee of the Provider, “100% of [their]

mortgage would have been on a tracker mortgage for the term of the loan.”

The Complainants state that they are “delighted” that the Provider agreed to move their

mortgage loan account ending 3467 to a tracker interest rate in 2020. The Complainants

note that they feel that the Provider should offer “a level of redress to mitigate the

negative financial impact of the poor financial support, advice and service [they] received in

relation to [their] mortgage.”

The Complainants are of the view that they have not been dealt with “fairly” by the

Provider regarding the interest rates offered. The Complainants maintain that they have

been “negatively impacted financially”. The Complainants submit that they are satisfied

with the Provider’s offer of transferring part of their mortgage to a tracker interest rate

but are concerned that this does “not address the fact that [their] monthly repayments

have been substantially higher over the years”. The Complainants are of the view that the

Provider should refund them the excess “in monthly repayments that [they] have been

repaying over the last 10 years.” The Complainants “strongly believe” that they “should

have been offered the tracker rate years ago when from a very early stage the “Staff

Preferential” rate was no longer competitive.”

The Complainants are seeking the following:

(a) Mortgage loan account ending 3467 to be transferred to a tracker rate of interest

and;

(b) A refund of overpaid interest from April 2009, when the mortgage loan account

was switched to a standard variable rate instead of a tracker rate of interest.

The Provider’s Case

The Provider states that the Mortgage Loan Offer dated 25 September 2007 for mortgage

loan account ending 3467 provided for a loan amount in the sum of €182,000.00 repayable

over a period of 30 years. The Provider notes that the interest rate was a “staff preferential

rate” of 4.00% as detailed in Special Condition (v) of the Mortgage Loan Offer. The

Provider submits that Special Condition (v) also makes it clear that if the Second