"New hope for borrowers in variable rate nightmare"

Brendan Burgess

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Charlie Weston has a front page article in today's Indo

New hope for borrowers in variable rate nightmare

Last Wednesday, the Court of Appeal heard the appeal by the Ombudsman against the High Court's ruling in the Millar complaint against Danske over the high Standard Variable Rate as reported on Askboutmoney at
High Court tells Ombudsman to look at Danske Bank's rate increase

The three judges in that court reserved judgment, which means they will provide a written decision at a later date.

Success for the Millars will have massive implications for around 320,000 homeowners on variable rates, and another 60,000 buy-to-let investors.

The case was heard before Mr Justice Peter Kelly, Ms Justice Mary Finlay Geoghegan and Mr Justice Michael Peart this week.

Founder of the Askaboutmoney.com website Brendan Burgess said: "The banks are scared stiff that the High Court judgment, which found against the ombudsman, will be upheld by the Court of Appeal.
"The implications for this are huge. It could affect almost everyone with a variable rate mortgage."

Barrister David Langwallner, who represented the Millars, said the case has huge implications.

"It will be a precedent-setting judgment, as it will regulate the banks' capacity to vary standard variable rates, if there is a qualifying ability to vary rates in the contact.

"And it will regulate the extent of the judiciary's ability to review the decisions of the financial services ombudsman.
 
Nice pipedream. But the establishment could never let this happen, could they? Should I hire a lawyer?
 
Deische how could you hope to pay a lawyer. Courts are only for the broke or the wealthy in Ireland. Empathise with your comment on the establishment.

That article makes my blood boil, why is the ombudsman siding with the bank in the appeal. How biased is that, is he not meant to be on the side of the little guys. Why didn't he let the bank take the case and avoid wasting taxpayers money on an appeal.

I see poster Padkiss is also quoted in the article, he's great the way he keeps battling away.
 
why is the ombudsman siding with the bank in the appeal. How biased is that, is he not meant to be on the side of the little guys. Why didn't he let the bank take the case and avoid wasting taxpayers money on an appeal.

Hi Bronte

Discussed here:
Why is the F.S.O. appealing the Millar case ?

1) The Ombudsman is not meant to be on the side of the little guys. He is meant to rule fairly and independently.

2) I am not sure that the bank could have taken the case. The original case was Millar vs. The Ombudsman. It's a peculiar situation, but I think that only the Omubdsman could appeal it. I have been involved with case where the lender appealed a decision by the Ombudsman, and the complainant was told by the Ombudsman that she had no role. That the Ombudsman would deal with it.
 
I believe thay any party on notice can appeal a Judgment that impacts on it, if it believes the judgment is flawed or erroneous.
 
Best of luck to the Millars, they may just make it over the line, due to Danske bank's description of what a variable rates was, when they entered into contract with Danske bank.
 
If the Millers are successful does this go for all SVR mortgage holders across the board or just Danske?
Was just about to ask the exact same question! Very interested in the outcome of this..... Is there a possibility, SVR could be slashed? Is that why banks are offering fixed rates cheaper than their SVR??
 
The answer to the question is that this legal action, if it suceeds, will only apply to Danske Bank mortgages, as it was a term in their variable rate clause which is subject to the action and not variable rate terms in mortgage contracts generally. The Appeal court can only decide on the Millars case alone, it would be up to each individual who has a svr mortgage with Danske bank to start legal proceedings if the Millars succeed in their action. However having said that, it would leave the door somewhat ajar for mortgage holders with other financial institutions to challenge their respective variable rate terms, depending on the wording in their contracts.
 
Hi ,

If the Millar case or other routes lead to high SVR been brought down and possibly refunded to customers of ALL banks, I have a query. We (regretfully) fixed our mortgage and lost our tracker, came out of fixed mortgage in 2009, complained to FSO and lost. I hear about a 6 year rule. Say our 6 years are up in July 09 since we came out of fixed rate, if implications of other cases like Millars bring benefits to other bank customers and we have gone beyond our 6 years, does that mean we have no hope of getting any benefit, while someone who has similar case to us but within the 6 year rule can get the benefits?
Is all hope lost after you have passed the 6 year limit is basically what I am asking?
 
raglan

I think that you have raised so many hypothetical points, that there is simply no clear answer.

1) Wait until you see if the Supreme Court upholds the High Court ruling. If they don't, all other cases fall.
2) If the Supreme Court upholds the High Court ruling, the Ombudsman must go back and hear the Millar case again, and may well rule against the Millars a second time.

2A) If the Supreme Court upholds the High Court ruling, then some brave customer of Danske will have to take a High Court case directly, and ignore the Ombudsman.
3) If that case wins, then some brave customer of the other banks will have to take a High Court case.

Of course, it's also possible, but extremely unlikely, that if the Supreme Court upholds the High Court decision, the Central Bank might order all banks to review their SVRs.

But do you want the low cost option?
Get onto your TDs and ministers and complain about your SVRs.
In time, that will actually bring down the rates.

Brendan
 
hi Brendan
thanks a million for staying close to this - you are great
I have complained to my TD who forwarded my concerns on to Michael Noonan
got a reply last Friday - I have it at home and will post it complete tomorrow but the gist was he has no control over banks commercial decisions.
l am so disheartened with the whole thing
as per Charlie Weston on Sat its mortgage apartheid for those of us on SVRs
keep up the good work
k
 
I have today contacted my local Fine Gael TD's highlighting the issue of high SVR rates at Irish Banks. Maybe if enough of us do contact them and with an election coming soon we may get them to do something. I am unable to switch because of negative equity so this is all I can do at the moment. Thanks to Brendan for keeping this issue highlighted
 
Well done to Brendan and all concerned on here highlighting this issue. I have found this website extremely informative. Great too to see this topic is getting more media attention.

I too am just about to contact all my local TD's and ministers to complain about the SVR.
 
Charlie Weston has a front page article in today's Indo

New hope for borrowers in variable rate nightmare

Last Wednesday, the Court of Appeal heard the appeal by the Ombudsman against the High Court's ruling in the Millar complaint against Danske over the high Standard Variable Rate as reported on Askboutmoney at
High Court tells Ombudsman to look at Danske Bank's rate increase

The three judges in that court reserved judgment, which means they will provide a written decision at a later date.

Success for the Millars will have massive implications for around 320,000 homeowners on variable rates, and another 60,000 buy-to-let investors.

The case was heard before Mr Justice Peter Kelly, Ms Justice Mary Finlay Geoghegan and Mr Justice Michael Peart this week.

Founder of the Askaboutmoney.com website Brendan Burgess said: "The banks are scared stiff that the High Court judgment, which found against the ombudsman, will be upheld by the Court of Appeal.
"The implications for this are huge. It could affect almost everyone with a variable rate mortgage."

Barrister David Langwallner, who represented the Millars, said the case has huge implications.

"It will be a precedent-setting judgment, as it will regulate the banks' capacity to vary standard variable rates, if there is a qualifying ability to vary rates in the contact.

"And it will regulate the extent of the judiciary's ability to review the decisions of the financial services ombudsman.

Does anyone any insight on the KBC (prev IIB) position ? We took out our mortgage with IIB in 2006 and were on a fixed rate until 2011, from them on at variable. Have obtained a copy of mortgage T+Cs from KBC and I can't see any definition of standard variable rate in that. I remember seeing in a previous post or article that KBC had similiar wording to Danske i.e. variable moved in line with market conditions. The current defintion they have on their website and in any correspondence is that variable rates ''may be adjusted by the lender from time to time''
Thanks
 
hi Brendan
I wrote to Michael Noonan about the standard variable rates being charged by AIB/EBS .
This is the reply

" Thank you for your letter dated December 2014 regarding AIB/EBS standard variable rates.
I must point out that I have no statutory function in relation to banking interest rate decisions made by individual lending institutions at any particular time.
It is a commercial decision for each lender to decide what interest rates they charge customers in relation to standard variable mortgages. Notwithstanding the fact
that the State is a shareholder in AIB, I must ensure that these banks are run on a commercial cost effective and independent basis to ensure the value of the bank
as an asset to the state. Under the Relationship Framework which governs the relationship between the Minister and AIB I recognise that the bank remains a separate
economic unit with independent powers of decision.
Ultimately the pricing of financial products including standard variable mortgage interest rates, is a commercial decision for the management team and board of each lending
institution, having due regard to their customers and the impact on profitability. This interest rate is determined taking into account a broad range of factors, including European Central Bank base rates, deposit rates, market funding costs , the competitive environment and an institution's overall funding arrangements.
The Central Bank has responsibility for the regulation and supervision of financial institutions in terms of consumer protection and prudential requirements and for ensuring ongoing compliance with applicable statutory obligations. The Central Bank has, however, no statutory role in the setting of interest rates by financial institutions.
your sincerly
Micheal Noonan

So where do we go from here?
any advice
thanks again
k
 
Well done.

Maybe write again and ask why the rates are so much higher in Ireland than in other EU countries and would he ask the Competition and Consumer Protection Council to investigate mortgage rates.

He says he can't interfere with the rates charged by the state owned banks. But that does not stop him from calling on the other banks to reduce their rates.
 
To be fair to the Minister he has no statutory function in mortgage rates, nor should he!! My own view is that it would set a dangerous precedent if politicians were to interfere in this market. I stand to be corrected, but I don't know of any country where mortgage rates are capped by statute! The Millar case is unique in that it relates to a change in interest rate on an existing contract. A Court decision is specific to the circumstances and while it will benefit those in a similar position, it will have no effect on others, whose circumstances differ.
I agree that SVR's in general give the bank total flexibility to charge what they like. However, unless/until a case is taken and succeeds in limiting the flexibility of SCR's to changes in market rates we are stuck with them.
 
I sent all my local TD's an email and also Brian Hayes MEP to thank him for his recent article. Brian replied to me and said thanks for the email and said we need to see movement from the banks.
 
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