advice please regarding BOI & FSOB

bmkearney

Registered User
Messages
20
can someone tell me what they think cheers have just sent following submissions to FSOB:

Firstly why have BOI not produced the letter we have sent in our original complaint to yourselves dated August 2008 regarding the Mortgage loan rate reverting to 5.5% representing the Tracker variable rate if no option signed and returned. This letter is very important as it contradicts the argument that BOI are using under Clause 7(b).

We also wish to challenge BOI on Clause 7(b) regarding failure to exercise a choice that the interest rate applicable to the Loan will be a variable interest rate. BOI have clearly not advised if this is a standard,existing,homeloan or tracker variable rate. This means that BOI are allowed to argue which of the above variable rates the Loan can revert depending on the markets rates at the time to suit themselves. On the same note then surely we are entitled to argue the same. The fact they do not clearly identify what the variable rate under Clause 7(b) refers to, we believe strengthen our case.

As you can see from all of our rate offers letters over the years we have been offered four different types of variable rates by BOI.( Homeloan variable rate,a Standard variable rate, an Existing Variable LTV rate and a Tracker variable ECB+1.25%). So which of the above variable rate option does Clause 7(b) represent or does it represent them all which is win win for BOI.

We again refer to the offer letter dated August 2008 that BOI were going to revert our Loan to a variable rate of 5.500%(tracker ECB+1.25%) and not that of the variable rate of 5.790%(homeloan variable). This letter is proof that our Loan was going to revert a Tracker variable rate.

Also the below is a paragraph from the consumerhelp.ie website regarding coming to the end of a fixed rate mortgage term.

At the end of a fixed rate term, your lender will write to you and outline your options, which may include:
moving to a standard variable rate
fixing for another term, perhaps 1,3 or 5 years
moving to a tracker rate - but only if this was offered to you at the time you signed up for the fixed rate. Look at the documentation your lender sent you when you signed up to a fixed rate, as this will detail what your interest rate will revert to after the fixed rate term ends. If a tracker mortgage was one of the options, then your lender must offer you the tracker rate, even if they are no longer widely available. If you do not have the documentation, contact your lender and ask for a copy.

If you are unhappy with the options your lender is offering you when your fixed rate term ends or you feel that your options were not explained fully, you can make a complaint.

We have underlined the part that is relevant. We believe this also improves our case as our offer letter dated August 2008 had a tracker as one of the options and also advised the loan would revert to the tracker rate of 5.500% as this was the end of our 2 year fixed rate taking out in August 2006.
 
Agree completely, there is serious ambiguity around how BOI define what a "Variable rate" is.

They call each mortgage type a Variable rate mortgage and use special conditions to further distinguish them.

It really depends on the exact wording of your fixed rate offer letter.

If the mortgage you held before you fixed was a variable rate mortgage that had a tracker clause attached then in my view it would be acceptable that any mention of a variable rate on the fixed offer letter would refer to the type of variable rate that was in force before you fixed, unless they have explicitly defined what they mean by a variable rate in the fixed rate offer letter.

Its time the central bank clamped down on this. Where there is ambiguity the benefit of that ambiguity should fall on behalf of the consumer.

Best of luck on your case with the fso.
 
To be honest, I'm struggling to follow your submission.

Are you saying that when you fixed in August 2008 the terms of the loan offer specifically stated that you would default to a tracker rate with a specified margin over the ECB refi rate in the absence of instructions from you?

Could you tell us exactly what that loan offer said would happen at the end of the fixed term?
 
To be honest, I'm struggling to follow your submission.

Are you saying that when you fixed in August 2008 the terms of the loan offer specifically stated that you would default to a tracker rate with a specified margin over the ECB refi rate in the absence of instructions from you?

Could you tell us exactly what that loan offer said would happen at the end of the fixed term?

What my offer letter in August 08 stated was that if I didn't sign and return the rate form I was going to default to a variable rate of 5.5% which represented the tracker ecb +1.25% in the offer list and not the homeloan variable which was 5.69%
 
What was the letter in August 2008? Was that your fixed rate loan offer or was it something else? If you give us the story in chronological order it would be helpful.
 
What was the letter in August 2008? Was that your fixed rate loan offer or was it something else? If you give us the story in chronological order it would be helpful.
I was coming to the end of my 2 year fixed rate and letter was sent with my rate choice which included option to fix again or select homeloan variable or tracker rate for me to choose and if I didn't make a choice the loan was automatically reverting to tracker rate
 
Last edited:
Thanks.

Ok, so you were originally on a tracker and fixed for two years in August/September 2006. At the end of that two year fixed rate term you had the option to fix again or to opt for a variable rate or a tracker rate and, in the absence of an instruction on your part, you would default back to a tracker at the same margin over the ECB rate as per your original loan offer.

You opted to fix again in August/September 2008 but this time the terms of the loan offer did not allow you to choose to opt to revert to back to a tracker rate at the end of the fixed term and in the absence of a decision on your part you would default to a variable rate. You are now making the argument that the variable rate in this loan offer should be interpreted as referring to a tracker rate at the same margin over the ECB rate as set out in your original loan offer.

Is that a fair summary of the facts? If I have misinterpreted anything please correct me.
 
Last edited:
Back
Top