Brendan Burgess
Founder
- Messages
- 52,076
I got a letter from AIB today with a substantial cheque - what's it all about?
You took out a mortgage between 2006 and 2009.
You had a fixed rate which ended between October 2008 and December 2013.
They should have offered you a tracker mortgage but they didn't.
Askaboutmoney.com has run a campaign for some years on the topic.
We brought one case to the Ombudsman who upheld our complaint.
AIB was told by the Central Bank to apply it to all 5,907 people in the cohort.
You should also see a reduction in your mortgage balance and your mortgage payments
Check your mortgage balance and you should see this line on it.
"FSPO BAL REDUCTION" which stands for "Financial Services & Pensions Ombudsman Balance Reduction"
It is 12% of the balance outstanding on the date your fixed rate ended.
Can I take cash instead of the write down of my mortgage?
No.
If they should have offered me a tracker, why am I not getting a tracker for the rest of the mortgage term?
The Ombudsman ruled that a fair solution would be to
1) Write down your mortgage by 12% of the balance outstanding on the date your fixed rate ended, and
2) To refund you the interest they charged on that write down.
Is it safe for me to cash this cheque?
Yes, you can cash this cheque immediately. You can still complain to the bank, to the Financial Services Ombudsman or to the court. But whatever happens, you keep your write down and you keep the refund.
Can I apply for extra compensation for the inconvenience and stress caused by not having this money over the last ten years?
Yes.
I am on a variable rate mortgage - what should I do?
AIB's charges higher mortgage rates for mortgages with higher Loan to Values e.g.
If the write off has reduced your loan to value to a lower band, you should apply to have your mortgage rate reduced.
For example
In this case the write down has reduced the mortgage from the Greater than 80% LTV band to the 50% to 80% LTV band.
I am on a fixed rate mortgage - what should I do?
AIB is allowing anyone on a fixed rate mortgage to break out of the fixed rate free of charge.
If the variable rate for you Loan to Value is less than the fixed rate you should break out now and switch to the variable rate.
You should not fix again for a little while as it is expected that fixed rates will fall over the coming months.
My monthly mortgage payment has been reduced from €1,000 a month to €800 a month. Can I leave it at €1,000?
Yes. Call AIB and tell them that you want to reduce the term of your mortgage rather than the repayment.
I don't trust AIB - how can I check that they have calculated this correctly?
The write down is simple enough. Check the balance when your fixed rate ended and multiply it by 12%.
User October2019 has created a very useful calculator for you to check the refund which you can find here
It is likely that the refund will be about €1,000 to €2,000 less than the figure given by the calculator. I believe AIB is calculating it incorrectly and have raised it with the Ombudsman. There is no need for you to do anything about it at this stage.
How did AIB make such a mess of all this?
Sorry, I have no idea.
You took out a mortgage between 2006 and 2009.
You had a fixed rate which ended between October 2008 and December 2013.
They should have offered you a tracker mortgage but they didn't.
Askaboutmoney.com has run a campaign for some years on the topic.
We brought one case to the Ombudsman who upheld our complaint.
AIB was told by the Central Bank to apply it to all 5,907 people in the cohort.
You should also see a reduction in your mortgage balance and your mortgage payments
Check your mortgage balance and you should see this line on it.
"FSPO BAL REDUCTION" which stands for "Financial Services & Pensions Ombudsman Balance Reduction"
It is 12% of the balance outstanding on the date your fixed rate ended.
Can I take cash instead of the write down of my mortgage?
No.
AIB - Can I take cash instead of the 12% write down?
Can the Central Bank therefore do something about this as it seems an unfair result not getting the cash but rather the bank decides to writ it off the mortgage balance? I’m I correct in using the 12% as a fixed rate of the balance when the fixed term finished or are there other rates and also...
www.askaboutmoney.com
If they should have offered me a tracker, why am I not getting a tracker for the rest of the mortgage term?
The Ombudsman ruled that a fair solution would be to
1) Write down your mortgage by 12% of the balance outstanding on the date your fixed rate ended, and
2) To refund you the interest they charged on that write down.
Is it safe for me to cash this cheque?
Yes, you can cash this cheque immediately. You can still complain to the bank, to the Financial Services Ombudsman or to the court. But whatever happens, you keep your write down and you keep the refund.
Can I apply for extra compensation for the inconvenience and stress caused by not having this money over the last ten years?
Yes.
AIB - If you are not happy with the AIB redress
Updated 20th June 2021 There are two main grounds for complaint 1) The Interest on the write down was calculated using simple interest. They should have used compound interest. https://www.askaboutmoney.com/threads/template-for-complaining-to-aib-over-compound-interest-issue.223901/ 2) You...
askaboutmoney.com
I am on a variable rate mortgage - what should I do?
AIB's charges higher mortgage rates for mortgages with higher Loan to Values e.g.
If the write off has reduced your loan to value to a lower band, you should apply to have your mortgage rate reduced.
For example
In this case the write down has reduced the mortgage from the Greater than 80% LTV band to the 50% to 80% LTV band.
I am on a fixed rate mortgage - what should I do?
AIB is allowing anyone on a fixed rate mortgage to break out of the fixed rate free of charge.
If the variable rate for you Loan to Value is less than the fixed rate you should break out now and switch to the variable rate.
You should not fix again for a little while as it is expected that fixed rates will fall over the coming months.
My monthly mortgage payment has been reduced from €1,000 a month to €800 a month. Can I leave it at €1,000?
Yes. Call AIB and tell them that you want to reduce the term of your mortgage rather than the repayment.
AIB - I want to keep paying the same mortgage payment
Even though my mortgage payments should decrease by approx 16% I would intend to keep paying the same amount in order to finish the mortgage early. If I was to move on to the 3 yr fixed rate of 2.55% does anyone know if you can specify that you want to overpay on a fixed rate without penalties?
www.askaboutmoney.com
I don't trust AIB - how can I check that they have calculated this correctly?
The write down is simple enough. Check the balance when your fixed rate ended and multiply it by 12%.
User October2019 has created a very useful calculator for you to check the refund which you can find here
AIB - AIB Prevailing Rate refund calculator
Hi everyone, I have done up a calculator which should give a fairly accurate idea of how much you will receive. It is a bit of a large sheet but the procedures at the top of the page are pretty simple, anyone familiar with basic excel can have it done in 2 minutes once they have their...
www.askaboutmoney.com
It is likely that the refund will be about €1,000 to €2,000 less than the figure given by the calculator. I believe AIB is calculating it incorrectly and have raised it with the Ombudsman. There is no need for you to do anything about it at this stage.
How did AIB make such a mess of all this?
Sorry, I have no idea.
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