Prevailing means current or at the time. The tracker rate at time of signing contract was still prevailing. And was relevant to that contract. Tracker rates offered to new customers were not prevailing for customers who drew done their mortgage 1 or 2 years previously. Wether they fixed or not
@joe351980 I think this definition may very easily end up with the courts to decide.
If I am told that I am going to be able to buy something at the prevailing price in 6 months time, I would not expect this to be today's price. I would expect this to be the price when the event comes to pass.
Similarly, if I am told I would roll over to the prevailing tracker rate in 2 years time, I would not expect this to be the current tracker rate today, but the current tracker rate in 2 years time.
If it was the tracker rate from today or date of drawdown, then surely the exact tracker rate should have been used (ECB +1.05% - or whatever), rather that a term such as prevailing? Or use the term tracker at date of fixing/draw down?
>>And was relevant to that contract. Tracker rates offered to new customers were not prevailing for customers who drew done their mortgage 1 or 2 years previously. Wether they fixed or not
This will be a matter for someone else to decide. It can be argued both ways, but I know how I would read it
I agree that the current/prevailing tracker rate for a customer who signed up to a 1.05%+ECB is irrelevant - whether that be yesterday or a year ago, as that is the rate they are charged in the contract terms. This is no difference to someone who signs up for a fixed rate where the rate is specified.
A customer who fixes has broken this prevailing (ie current) tracker rate and fixed at a totally different rate, by their own choice, for a period of time. After this event expires (matures or breaks out early), then the current/prevailing rates are important to them, not the historic ones. I would argue that the rate the customer signed up to 3 years previously is historic rather than current and irrelevant.
But that said, that would be my interpretation of the word "prevailing" - but it is not my decision. It will be agreed somewhere and I think it will end up being decided by the courts.
There is another way to decide this. Do the banks have a case where someone fixed for 1-2 years in 2005/06 who was entitled to a tracker rate on maturity. The scenario needed is where a tracker was still being offered at the time when the fixed rate matured. Were they offered (ignore what they accepted), the initial tracker rate from the date of drawdown, the tracker rate from the date the fixing period commenced or the tracker rate on the date of the fixing period ended. The answer may help work out how the banks interpreted the term at the time (not with hindsight).
This would clearly set the precedence as to what the banks done at the time? I assume banks would have customers whose fixing periods expired just before the removal of the tracker mortgages ?