Tracker Mortgage Decision Reference 2023-0076

• Case Outcome: Rejected
• Subject Matter: Tracker Mortgage
• Reference: 2023-0076
• Date: 30 March 2023
• Finantial Sector: Banking
• Conducts Complained Of: Failure to offer a tracker rate throughout the life of the mortgage

Decision Ref:

2023-0076

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

The 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’ residential investment property.

The loan amount was €176,000.00 and the term of the loan was 25 years. The Letter of

Approval dated 03 November 2008 provided that the loan type was a “variable rate

interest only residential investment loan” and that the interest rate applicable was 5.4%.

The mortgage loan was drawn down on 19 November 2008.

The Complainants’ Case

The Complainants state that in 2008 they “had to separate out a mortgage that was

covering five properties in total that [they] either separately owned or shared ownership.”

The Complainants submit that their “Jumbo mortgage” was offered to them at ECB + 0.6%

as “existing customers” and, as such, they “were enticed to keep [their] business with the

then Branch Manager”.

The Complainants submit the Provider confirmed to them that it would offer them a

tracker mortgage if they “continued to keep [their] business” with the Provider.

- 2 -

/Cont’d…

The Complainants state that the branch manager “was very keen to entice [them] to keep

[their] business with [the Provider] in 2008 and [the branch manager] verbally confirmed

that [they] could keep tracker mortgage rate(s) and transfer them to the new mortgage.”

The Complainants outline that “without practically any warning” they “were informed that

[the Provider] would no longer honour the tracker rate” which had been agreed. The

Complainants contend that “someone took the decision to renege on the tracker mortgage

offer”. The Complainants maintain that they “strongly believe that [the Provider] acted in

bad faith and took advantage of a very stressful situation”, which forced them to “pay a

higher rate than what was agreed.”

The Complainants explain that as they were in the process of separating, they “felt like

[they] had no choice but to go with what was offered.” The Complainants assert that they

were “very stressed”, and they never received any letter of warning that the tracker

interest rates were being withdrawn.

The Complainants note the Provider’s submissions that it had withdrawn tracker rates

“generally” in mid-2008, however the Complainants submit that the Provider was still

offering tracker rate mortgages to existing customers in that period.

The Complainants refute the Provider’s assertions that their broker requested a variable

interest rate on their behalf. The Complainants assert that the tracker interest rate was

withdrawn “unilaterally” by the Provider, and they were “forced to choose a variable rate

mortgage”. The Complainants submit that it is a “complete misrepresentation” that their

broker asked for a variable interest rate over a tracker interest rate and state that their

broker was “back and forth” with the Provider on many occasions attempting to get the

tracker interest rate reinstated. The Complainants submit that it made “no sense” that

they would choose a variable interest rate of 5.9%, rather than a tracker interest rate of

5.35%.

The Complainants submit that they were “trying [their] utmost to complete the 17 Special

Conditions as per Letter of Approval” and they understood that most offers expire after 6

months or a year. The Complainants submit that when they “finally did find out about the

withdrawal of the tracker, [they] could not complete in time the Special Conditions”. The

Complainants rely on Provision 13 of the Consumer Protection Code 2006 in that regard.

The Complainants submit that the Provider did not “act fairly or provide notice to [them]

that the tracker rate as originally offered was being removed as an option on this

property.” The Complainants note that the Provider is supposed to “act in the best

interests of the customer” under the Consumer Protection Code.