So I became a little bit more pro-active about things over the coming days. I have reviewed my mortgage contract and contacted AIB. My story is the Following:
1. Drewdown on a staff Preferential fixed rate of 3%
2. Moved onto a ECB tracker
3. Moved back to 3% Staff Preferential Fixed rate of 3%
In January 09 AIB issued to all staff advising due to BIK that it was not beneficial to staff to remain on the 3% and they were rolling all mortgages to the SVR rate of 3.2%.
From reviewing my contract I have the clause 3.2 in my T&C's of:
"At the end of any fixed interest period, the Customer may choose between:
(a) a further fixed interest period, or
(b) conversion to a variable interest rate Mortgage Loan
(c) conversion to a tracker interest rate Mortgage Loan
"at the bank's then prevailing rates appropriate to the Mortgage Loan. If the customer does not exercise this choice, then the Mortgage Loan will automatically convert to the variable interest rate Mortgage Loan."
They never advised I had the option (c) of conversion to a tracker in Jan'09.
AIB content that the 3% preferential rate was not a fixed rate, however it states in the special conditions of the contract it was & that the breakage cost from the clause 3.3 did not apply if moving to a different rate from the staff fixed rate of 3%. I see AIB are offering 3.67% to people who have the clause 3.2 in other threads which is a crazy rate.
Bump
Anyone have any thoughts on this. A family member contacted me last night and appears to be in the same boat as Selvin above (and a raft of other people).
They moved jobs to AIB and moved their mortgage to the staff mortgage in 2006.
As such they're loan was split between a portion on a tracker / and a portion on the "staff preferential rate". This "staff rate" had the same clause as Slevin listed above (from their memory - they've to dig out their docs yet).
When they removed the Preferential rate they were contacted and advised SVR or Fixed were only options. They specifically remember being told that the tracker option was no longer an option.
This issue would appear to fall into the AIB's wider stance re the "Prevailing Rate" of ECB + 3.67% (AIB reiterated this to the Finance Committee in Sept 27, 2017 - link at end).
I've a couple of problems with this:
- Family member was not offered this tracker + margin in Jan '09.
- The simplest argument is the prevailing rate should be the rate applied to the closest loan matching this loan - which of course would be the other part of their mortgage (the tracker part which is ECB+1.1%) i.e. same Borrower, same security, same credit history
- The wording is vague, and the attitude that seems to be gaining traction is that where wording is vague the Bank's should come down on the side of the Borrower/Consumer.
At the Finance Committee Bernard Byrne sought to justify the ECB+3.67% "prevailing rate" based on the disconnection between the Bank's funding costs & the ECB rate.
I'm not sure I fully agree with this argument.
The Bank's cost of funds is a separate issue to the "prevailing rates appropriate to the Mortgage Loan" i.e. the wording highlighted references "the Mortgage Loan", not a "Mortgage Loan Pool".
In this case the specific Mortgage Loan was - (i) performing, (ii) aged [as in the loan had been in existence for over 5 years], (iii) low initial Loan to Value (<80%) [what the LTV at the time was is a different question].
Anyway, I'm wondering if anyone has any thoughts on this (i presume there's a huge number of AIB staff affected). My cousin is going to get her docs together and get all her ducks in a row.
https://beta.oireachtas.ie/en/debat...diture_and_reform_and_taoiseach/2017-09-26/2/