Bank of Ireland drops it clawback of the 2% cash back.

trasneoir

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From Charlie Weston today:

Bank of Ireland had a condition attached to this allowing it to clawback the cash if the mortgage holder paid off, or switched, the mortgage within five years of draw down.
But the bank has been forced to drop the claw-back threat after this was banned under an EU directive that was introduced earlier this year.

http://www.independent.ie/business/...500-to-take-out-150000-mortgage-35003874.html

I have questions.
  • Can anybody confirm?
  • Will this mean the end of the cashback mortgage, or will banks start to turn away frequent switchers?
  • In the meantime, can punters make 10-20k by taking their mortgage on a tour of all the banks offering bonuses (with clawbacks that they can't enforce)?
 
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Very interesting.

Sarenco has argued elsewhere that the claw back clause was not valid under the Consumer Credit Act.

Great news.

BoI customers can now switch to EBS and get 2% from them. They don't have a clawback clause in their contracts.

Brendan
 
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Yes, it looks as if it's gone ok. No mention of it anymore in their Offer Details .

I have attached the web page to this post for the record.

upload_2016-8-30_8-19-26.png


This is what it used to say

upload_2016-8-30_8-18-29.png
 

Attachments

  • Bank of Ireland 2% cash back web page 30 August 2016.pdf
    1.1 MB · Views: 242
Come to think of it, this won't affect many BoI customers for a while. Most fixed, so they will have to wait until the fixed rate period is up.

But I suppose a lot fixed for one year.

They can now get 2% cash back from EBS and lower variable mortgage rates.

Brendan
 
permanent tsb still has the clause on its website

Terms and conditions for 2% cashback
The following terms and conditions will apply in relation to the mortgage incentive (“the Promotion”):

  1. permanent tsb will only pay the 2% cash back on the amount of mortgage advanced, to loan applicant(s) who received full mortgage Letter of Approval** from permanent tsb between 11 January 2016 and December 31 2016 or such other extended date as permanent tsb may decide (“the Qualifying Period”) where permanent tsb agree to advance a loan to be secured on the applicant’s principal private residence.
  2. The loan applicant(s) cannot avail of the Promotion if they are a tracker portability or negative equity customer, including any additional funds that may be drawn as part of the new mortgage application. It also does not apply to buy to let, equity release or home improvement mortgage loans. Customers who have already drawn all or part of their mortgage funds on or before 11 January 2016 are also not eligible for this Promotion.
  3. A loan applicant(s) whose mortgage Letter of Approval is dated after the Qualifying Period will not be eligible to avail of the Promotion (and similarly any Letter of Approval amending original Letter of Approval issued post ‘Qualifying Period will not be eligible).
  4. The payment of the 2% cash back will be made by permanent tsb by electronic funds transfer into the mortgage paying current account not later than 20 working days from the date of each stage of loan draw down.
  5. The Bank reserves the right to seek refund of payment of the cashback if mortgage is redeemed in full within 5 years. The loan applicant must return such sum immediately to permanent tsb.
 
Anyone know when the clawback rules with BoI ceased...Monday 21st March when the EU Directive on Mortgage Lending came into force?
 
I am not sure that it has anything to do with the EU directive. Penalties for early repayment have been banned in Ireland since the Consumer Credit Act.

Permanent tsb has not yet deemed it necessary to amend their offer.

Brendan
 
Well the BoI Mortgage guy was fairly explicit with me in April when I drew down my mortgage that early payment in full/part would see the clawback kick in on the 2%
 
Hi Delboy

I am sure that your contract specifies that they can claw it back.

But it may not be enforceable. It depends on why they dropped it.

I presume you fixed your mortgage rate? If so, how long did you fix for?

Brendan
 
That story in the Spindo initially said "Bank of Ireland to pay customers €9,000 to take out €15,000 loan".

Kinda hard to take anything you read there seriously when they post such rubbish to their site and leave it up for hours before an adult looks at it.
 
Hi Mrs Vimes

I have corrected errors/typos frequently on the websites of the Irish Times and RTE. They are not edited to the same extent as the paper versions. If you see something like that, email the author. In my experience, they appreciate it and correct it very quickly.

Brendan
 
I availed of the 2% BOI cash back in mid April this year and fixed for 1 year. It sounds like I may be able to leave at the end of this year now without having to pay back the clawback. I recall at the time that the lady I dealt with said that they actually had no process internally for taking the money back for early repayment.

How could I find this out for sure?
 
Hi pauric

It will all be clear by next April. No need to worry about it in the meantime unless the penalty for breaking out is very small.

In the meantime, write to Bank of Ireland and ask.

Brendan
 
Presumably the banks would refuse an applicant who was demonstrably availing of incentives and then moving on?

Say Mr X signs up with EBS and then 3 months later applies to BOI. BOI are likely to see through the ruse. Although maybe I'm giving them too much credit!
 
Well the BoI Mortgage guy was fairly explicit with me in April when I drew down my mortgage that early payment in full/part would see the clawback kick in on the 2%

Hi Delboy

The clawback language was actually quite clever in that BoI "reserved the right to seek repayment" - rather than saying that a fee or charge would automatically apply on early redemption of the loan (which would be illegal under the Consumer Credit Act).

In my view, BoI could never have enforced the clawback clause - they never had a "right" to reserve - so if a better deal becomes available to you elsewhere, I wouldn't hesitate to switch.
 
Brendan,

In view of BOI dropping the clawback, would you reconsider your opinion that BOI is not a "best buy", say fixing for 1-2 years then changing to a better deal if interest rates stay as of today?
 
Sorry Brendan just to confirm why are you referencing April in your messages? Why is this date significant? Are you referring to Delboy's fixed rate expiration?

Has anyone with existing SVR mortgages approached BoI about switching and the implications of this on the 2% clawback?

thanks

rollo28
 
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