AIB Anyone with a Prevailing Rate split mortgage taking further action?
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Introuble83
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For me I received a write down as part of my original split. A write down off my active part as part of the FSPO , a write down off the warehoused and then a 30% write off on the written off warehoused amount . This equates to 91k and a cheque for around 14k on the way . I feel at this point it would be morally wrong to look for more . AIB have been good to me. I nearly feel sorry for them .
Brendan Burgess
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Introuble raises a very good point.
So the first question is why did you need a split?
Most people needed it because of a fall in their income and not because they were on a mortgage rate much higher than ECB +1.5%
Sure you were overcharged.
But if you got a split mortgage, the interest rate was effectively reduced.
You don't need to make any payments on the warehouse until the end of the mortgage.
And if you got a write off as Introuble did, then you are better off now than you would have been had you been on a 1.5% tracker from the start with no need for a split mortgage.
Don't forget that if you have an AIB split mortgage, you should give serious consideration to using the cash to pay down the warehouse and earn a 30% once off bonus on it.
So the first question is why did you need a split?
Most people needed it because of a fall in their income and not because they were on a mortgage rate much higher than ECB +1.5%
Sure you were overcharged.
But if you got a split mortgage, the interest rate was effectively reduced.
You don't need to make any payments on the warehouse until the end of the mortgage.
And if you got a write off as Introuble did, then you are better off now than you would have been had you been on a 1.5% tracker from the start with no need for a split mortgage.
Don't forget that if you have an AIB split mortgage, you should give serious consideration to using the cash to pay down the warehouse and earn a 30% once off bonus on it.
AIB - If you have a split mortgage and you are in the AIB Prevailing Rate cohort...
You should give serious consideration to paying the interest refund against the warehouse. AIB is setting part of the write down against the warehouse - e.g. €10,000 If the split mortgage is less than 5 years old, AIB pays a 42% bonus on any money paid off the warehouse. So they are then...
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ladybirdy2020
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I wonder myself also. Yes, the personal circumstances had changed at the time. This was after all a huge financial crises. But to dismiss paying way more than we should, it could have made a difference at the time. For starters the debt we had. Part of the debt were calculated over the wrong interest. Therefore, they part wrote off a debt that they actually had with us. And for the bank to offer a split, it was because we were doing everything we could to keep paying. So although it was not their fault we were experiencing difficulties but they did contribute to it. And that's that bothers me and its key.
Having said that, the split has helped us a lot making the mortgage more affordable. So I'm grateful. But there are cons and pros with the scheme. The 30% 'bonus' is only during the first 5 years and only if its made payments to that account. Its an incentive to pay ASAP the warehouse because we could ended up retiring with the debt.
Unfortunately its not been my case. Regrettably because i couldn't save until recently so I'm hopeful to start to pay up because the warehouse part is not going away. It will need to be paid in the end, sooner or later. Its also my understanding that my credit rating is affected.
What I will complain for certain, its that they didn't give me the option of where the money would go, warehouse or base loan. By contract any lump sum MUST go the warehouses part. Also the timeline. My 5th year anniversary was in August. I haven't received the cheque, a letter explaining the money calculation and the option to put the money in the warehouse to avail of my discount by contract.
Having said that, the split has helped us a lot making the mortgage more affordable. So I'm grateful. But there are cons and pros with the scheme. The 30% 'bonus' is only during the first 5 years and only if its made payments to that account. Its an incentive to pay ASAP the warehouse because we could ended up retiring with the debt.
Unfortunately its not been my case. Regrettably because i couldn't save until recently so I'm hopeful to start to pay up because the warehouse part is not going away. It will need to be paid in the end, sooner or later. Its also my understanding that my credit rating is affected.
What I will complain for certain, its that they didn't give me the option of where the money would go, warehouse or base loan. By contract any lump sum MUST go the warehouses part. Also the timeline. My 5th year anniversary was in August. I haven't received the cheque, a letter explaining the money calculation and the option to put the money in the warehouse to avail of my discount by contract.
Brendan Burgess
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Hi Ladybird
Not sure that they should have given you this option.
It's as if you had two mortgages - An active one of €200k and a warehouse of €100k.
Both were denied the tracker and I think it was right to apportion the €30k write down in proportion.
Of course, the complicated and correct thing to do would have been to examine each case individually.
Would they have needed the split if they had been on a tracker of 1.5%?
If not, then reset the mortgage according to the original with no split.
I suspect you are far better off the way they have done it. You still have a split.
I think you probably have a good case for arguing that the 30% bonus should be paid as it was their delay which caused you to miss the deadline.
If you miss the 5 year deadline, there is a 20% bonus for payments off the warehouse between 5 and 10 years. So say the following figures
Total write down: €30k
Write down against warehouse: €10k
Additional write down at 30%: €3,000
Additional write down at 20%: €2,000
Cost of missing the 5 year deadline: €1,000
I would be surprised if they rejected a complaint on this over €1,000 if you are happy otherwise.
Brendan
ladybirdy2020
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Thanks Brendan for the reply.
Your point is valid and the split is only beneficial if payments are made to the warehouse within the first 10 years. I was not into financial but now I'm trying to get my head around it. It bothers me that the AIB was contributing to the hardship at the time.
Regarding the option for lump sum on the warehouse or base loan part. See below what the contract says. I don't have the option to put it in the base loan.
On my particular case, if I could get the money into the warehouse with bonus, it would be an additional 10k. And i could bring my LTV down below 80% so the base loan payment would be reduced by decreasing the interest.
Your point is valid and the split is only beneficial if payments are made to the warehouse within the first 10 years. I was not into financial but now I'm trying to get my head around it. It bothers me that the AIB was contributing to the hardship at the time.
Regarding the option for lump sum on the warehouse or base loan part. See below what the contract says. I don't have the option to put it in the base loan.
On my particular case, if I could get the money into the warehouse with bonus, it would be an additional 10k. And i could bring my LTV down below 80% so the base loan payment would be reduced by decreasing the interest.
Brendan Burgess
Founder
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- 52,324
Hi ladybird
Could you give us some numbers please.
What was the balance on your mortgage on the date the fixed rate ended?
Before the write down, what was the balance on your active account and what was the balance on your warehouse?
Brendan
Could you give us some numbers please.
What was the balance on your mortgage on the date the fixed rate ended?
Before the write down, what was the balance on your active account and what was the balance on your warehouse?
Brendan
ladybirdy2020
Registered User
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Balance 09/11: 317k
From 06/14 until 05/15: interest only payment 4.40% 1000euro per month
08/2015 split: base 196k & warehouse 108k. Loan term extended to 30 years. 850euros per month.
sorry...just to correct how the 30% works.
Warehouse: 10k (70%)
30% additional: 4285k (10x30÷70)
20% additional: 2857k (10x20÷70)
From 06/14 until 05/15: interest only payment 4.40% 1000euro per month
08/2015 split: base 196k & warehouse 108k. Loan term extended to 30 years. 850euros per month.
sorry...just to correct how the 30% works.
Warehouse: 10k (70%)
30% additional: 4285k (10x30÷70)
20% additional: 2857k (10x20÷70)
Brendan Burgess
Founder
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- 52,324
Brendan Burgess
Founder
- Messages
- 52,324
But that is much more generous that I had already thought.
Lodge €7,000 and they will treat it as a €10,000 lodgement. They are adding €3,000 to the €7,000 or topping it up by 43% instead of 30%.
Lodge €8,000 and they credit you with €10,000 so it's a top up of 25%!
Brendan
Lodge €7,000 and they will treat it as a €10,000 lodgement. They are adding €3,000 to the €7,000 or topping it up by 43% instead of 30%.
Lodge €8,000 and they credit you with €10,000 so it's a top up of 25%!
Brendan