Tracker Mortgage Decision Reference 2023-0012

• Case Outcome: Rejected
• Reference: 2023-0012
• Date: 23 January 2023
• Year: 2023
• Subject Matter: Tracker Mortgage
• Finantial Sector: Banking
• Conducts Complained Of: Failure to offer a tracker rate throughout the life of the mortgage

Decision Ref:

2023-0012

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

Background

This complaint relates to a top-up mortgage loan application made by the Complainants to

the Provider.

The First Complainant held a mortgage in his sole name with the Provider under mortgage

loan account ending 877/3, which was secured on the First Complainant’s principal private

residence which later became the Complainants’ family home.

The First Complainant’s original mortgage loan was for a loan amount of €95,000.00 and

the term of the loan was 20 years. The Letter of Offer dated 06 February 2007, which

governs this mortgage loan account, outlines that the interest rate applicable to the loan

was a fixed interest rate of 4.99% for the first 36 months of the loan.

The Complainants subsequently approached the Provider in 2010 to apply for a top-up

mortgage loan in their joint names for a loan amount of €80,000.00.

The Complainants’ Case

The First Complainant outlines that he held a mortgage loan with the Provider which was

operating on a tracker rate of interest. The First Complainant submits that he married the

- 2 -

/Cont’d…

Second Complainant in 2009 and “together [they] decided to extend [the] property”. The

Complainants detail that they made a joint application to the Provider “to extend the

original mortgage by €80k which would leave [them] with a total mortgage of €160k”.

The Complainants submit that, as there was a lot of discussion about tracker mortgages in

the media at that time, they “were fully aware that [they] would not be getting a tracker

rate on the additional €80k” and so “did not even request same”. The Complainants state

that all they were hoping for “was a smooth process with the mortgage application” and to

commence building works on the property. However, the Complainants state that they

became aware early on, that obtaining the top-up mortgage “would not be a smooth

process”.

The Complainants outline that they made a joint mortgage loan application through a

broker and “submitted all the relevant documentation”. The Complainants detail that the

Provider issued an approval in principle letter dated 04 August 2010, advising that “€160k

would be considered subject to a number of conditions”.

The Complainants state that their broker submitted their life policy to the Provider on 11

October 2010. The Complainants submit that their broker advised them that “the

timeframe for changing the mortgage to joint names is 2 – 3 days, after this the loan offer

needs to be issued, [which] will take another 2 to 3 days”. On 14 October 2010, the

Complainants outline that they were informed by the Provider that “there was a

misunderstanding” and that it was explained that the Provider could not assess the

Complainants’ application for a top-up mortgage loan until a deed of transfer was

executed.

The Complainants submit that the deed of transfer was executed and submitted to the

Provider “after a delay” on the part of the Provider. The Complainants outline that the

process lasted 6 months and at that stage, they were required to submit a new mortgage

loan application and up-to-date documentation. The Complainants also note that they

were advised that the Provider “could not commit to an official Letter of Offer even if this

information was submitted”, which the Complainants contend was “another roadblock

being put up in front of [them] at the end of a long process”.

The Complainants maintain that the Provider was “probably trying to get [their] existing

tracker mortgage off [its] books”. The Complainants state that “[a]t this point after 6

months” and “[a]fter a very vexatious process”, they “capitulated”, settled their account

with the Provider, and took out a new mortgage with another financial service provider

“without any difficulty”.