AIB AIB "Standard Variable Tracker" rate

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tommygirl

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We took out a split rate mortgage in May 2006. We did 20% 5 year fixed and 80% 1 year fixed.
On expiry of 1 yr fixed rate, I selected the tracker rate <80%. They wrote back to say that I needed to provide a valuation report. I received this letter the week my 1st child was due. There was little difference in the rates at that time and I'm not sure we would have made <80% at that time. I believe they said I was put on SVR. I have often bemoaned this decision in the intervening years!

I was looking through old paperwork yesterday and saw a letter from AIB in 2011. It said that the 20% was on a SVR on 3.25% and the 80% on a SVR tracker rate of 3.25%. This looks like a margin of 2.25%. Both parts of the mortgage are currently on SVR of 3.4%. I have just last week sent in a valuation report to move both to <50% LTV due to go to 2.75%.

What should I do now? Wait and see what AIB do? Send in a copy of this letter and ask them to review? Ask them what the difference between SVR and SVR tracker rate means? I probably have more paperwork that I can root out if someone can guide me as to what would strengthen my case. Were people ever worse off on tracker even at 2.25% margin?

Thanks
Tommygirl
 
Just to update on my research. I went back over all my mortgage statements since the expiry of the fixed rate in May 2007 and found the following:
  • From May 2007 up until May 2009, whenever the ECB changed its interest rate, within one week the interest rate on my mortgage account changed. Am I correct in thinking that this indicates that it was a tracker mortgage as the Standard Variable rate would not have changed that quickly?
  • The initial margin on the ECB rate was 1.1%. In January 2008 the margin was changed to 1.25% and this margin continued until May 2009.
  • In March 2010 the interest rate start increasing on the mortgage account without any corresponding change in ECB rate so it looks as if I lost the tracker between May 2009 and March 2010. As far as I recall I never requested any change in rate.
  • Based on letters from AIB, in October 2008 I requested fixed repayments so in order to achieve this they reduced the term on the loan. In March 2009 I requested that the term be extended back to the original date. Unless at that stage they reviewed and took away the tracker?
I think I will write to AIB requesting confirmation that this mortgage was a tracker mortgage, that they changed the margin on this mortgage from 1.1% above ECB to 1.25% in January 2008, and that the tracker mortgage was removed from this account prior to March 2010. The letter in October 2011 however states tracker but the ECB link was gone at that stage.

Any advise before I send letter off? I am including a table with ECB rate changes and my account rate changes which clarifies the ECB link for them. I want to give this my best shot. Should I get professional advise prior to contacting AIB?
Thanks again
Tommygirl
 
Hi,

It's hard to work out whether you ever had a tracker or not.

Just some info that might help you.

Have a look at this press release re changes to SVR - does this align to the change from 1.1% to 1.25%?

https://group.aib.ie/content/dam/ai...B announces changes to its interest rates.pdf

Similarly, it looks like the SVR did change in line with ECB prior to that:
https://group.aib.ie/content/dam/ai...B announces changes to its interest rates.pdf

And even continued in Jan 2009:
https://group.aib.ie/content/dam/ai...b-announces-changes-to-its-interest-rates.pdf
 
Thanks RedOnion,
Those press releases tie-in very well with the changes in my account:(. I got my hopes up for a while. I will probably write to them and ask what the difference is between SVR and SVR tracker rate - it's looking like its just a name. An outside chance I know but seeing as I requested a tracker rate at the end of the fixed rate period even though I did not provide a valuation report would I have any sort of argument for the >80% tracker rate? Probably not.....
An interesting exercise nonetheless to see how the SVR and ECB diverged from March 2010 - margin went from 1.25% to 4% diff in December 2014.
Will just have to accept the 2.75% <50% LTV from 1st November and be glad.
 
Did you rate match exactly the SVR rates in those press releases?
I've never seen the term SVR tracker, but is there a chance you were on a rate that tracked SVR (e.g SVR - .1%)? This was before they came up with an LTV rate.
 
tommygirl said:
the 80% on a SVR tracker rate of 3.25%.
Click to expand...

Hi tommy

That is weird. Is that the actual wording they used? Like Red, I have never heard it before.

Usually you would be told that your rate will track the ECB rate.

Ulster Bank does price its mortgages off their SVR. For example, a 50% mortgage might be SVR -1%.

Could you scan in the document which says "SVR tracker"?



The first thing to do is to write to AIB and ask them to confirm that your mortgage is part of the Central Bank tracker review. Their reply will explain everything to you, or their version of everything.

Then go to Padraic Kissane to check it out for you.

Brendan
 
Left the letters at home but will scan them in tomorrow. Two letters dated the same date in October 2011. One says Standard Variable Rate (came off fixed rate in May 2011) and one says Standard Variable tracker rate (came off fixed rate in May 2007), both at 3.25%.
Press release for SVR Jan 2008 does tie in with change in 'margin' from 1.1% to 1.25% so looks like I was on a variable rate.
 
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Very strange wording. Even a Google search of the exact wording returns nothing.
It's almost like the letter was written from a template and someone forgot to delete either the SVR or Tracker word.
 
You took out the mortgage in 2006.
This letter was dated 2011 .

This is clearly human error on their part.

upload_2017-10-9_19-21-47.png


You seem to have sent in a query and someone drafted a reply to it.

It's an SVR and not a tracker.



Brendan
 
To be honest, it looks as though whoever typed the letter simply forgot to delete the words "tracker rate" from the email - if you look closely at the spacing between the words you can see that it was a "cut and paste" job.

Edit - what Brendan said!
 
It does look like human error, but the benefit of any amtbuiguity should fall on behalf of the consumer.
 
todo said:
It does look like human error, but the benefit of any amtbuiguity should fall on behalf of the consumer.
Click to expand...

Agreed when it comes to the mortgage contract itself but an email response to a query doesn't change the contract.
 
Hi todo

If a contract is vague and the borrower makes a decision based on it, it should be interpreted in favour of the consumer.

But if an error 5 years later has no impact on the customer, then there is nothing for the customer to be compensated for.

Brendan
 
I know I am stuck with a variable rate. Rest of post probably belongs to Letting Off Steam...
Rollover letter arrives, I ring bank. Advised that I can select tracker <80%>50% so sent back letter (rate confirmed via phone as I have note on rollover letter). Arrived home from hospital with first child to letter stating need up to date valuation report. As per mortgage contract, loan rolled over to SVR - was not aware or bothered about the rate at that stage! I could 'possibly' argue that had I received the correct information on the phone I would have selected the relevant tracker rate instead but did not and did not follow up on same. When 'margin' increased in Jan 08 I could have gone back to the bank and argued for relevant tracker rate but did not (probably unsuccessfully anyway). Rates were following ECB anyway with one exception. Bit of a bad financial decision but my mind was on more important matters.
A little bit of a shoulder shrug starts turning into 'OH NO' in 2010 when the SVR starts increasing exponentially. I have given myself a stern talking to about money matters in the intervening years. Accepted that I made a disastrous financial decision but fortunately we have been able to afford mortgage and no lives were lost. It was all in the past until I found these letters at the weekend coupled with the fact that I had requested a tracker rate at rollover I thought maybe there was a slim chance that they did put me on a tracker. Then when I saw how closely my rate was following the ECB I thought I was definitely onto a winner. Thanks to replies here I know I have no argument to make.
Interesting exercise though to see graphically where the Banks changed their policy and excessively penalised SVR mortgage holders.

upload_2017-10-10_9-34-38.png
 
You need to ignore this letter, and go back to your original loan offer / contract.
Should you have been offered a tracker on the portion that ended fixed in 2011? Is there a tracker rate mentioned there?
Depending on that you might already be included in their review.
 
I am back to update with more questions and apologies for the long post..
I requested to be included in the Tracker Review and received a final response yesterday to say that I was included in the review but that I am not impacted. I have submitted a Subject Access Request looking for phone recordings and notes on my file but I received some documentation with the final response.
On rollover from Fixed Rate in 2007 I received an options letter. Advised that in the absence of response would be placed on SVR.
Rollover letter contained a number of options including 4 different tracker rates. I had twox10 minute conversation with AIB Home Mortgages department and when I said that I wanted a tracker rate I was advised that I could select whatever one I wanted. I asked what documentation was required and I was told none. I recall a discussion on house prices were only increasing and also that if I wanted a LTV<50% tracker I would have to provide a valuation cert. Rollover letter states that valuation cert required if select option <60% LTV. Due to personal circumstances with first child due I wanted to ensure everything was done and dusted hence phone calls to clarify.
As outlined above, AIB wrote back to ask for an up-to-date valuation cert in order to apply >50%<80% rate. It did not state what rate had been applied nor did it include another options letter.
The final response stated that I requested an unsuitable tracker rate, did not submit valuation cert therefore went to SVR and stayed on SVR.
My questions are:
Both rollover letter and conversation with bank state that I do not require to submit a valuation cert to get this rate. The goalposts then changed. How as a consumer am I meant to deal with the changing goalposts - what protection do I have?
Todo mentioned above that the benefit of any ambiguity should fall on behalf of the consumer. In my eyes there is no ambiguity - no valuation cert required if not <60%, conversation with 'expert' staff confirmed same.
Is each individual tracker a different product? My understanding is that there are 3 types of mortgages - fixed, variable and tracker. If I was not entitled to the tracker that I selected (even though it complied with all documentation and conversations) would I not be entitled to the applicable tracker rate? AIB states that they will only amend an interest rate on receipt of a signed request.
AIB made no reference to the phone conversations nor the rollover letter regarding requirement for valuation cert only if <60%. Should I go back to them asking them about this or do I have to go straight to the Ombudsman?
I am not sure that I will receive the phone recordings but feel that it would certainly strengthen my case if I had them (or do contributors think I have any case at all?)
When all documentation and recordings are received I will probably seek advise from P.Kissane but would appreciate peoples views.
Thanks
A very disappointed Tommygirl
 

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My reading of contract is that LTV at drawdown defines your LTV band and tracker margin. If you want to avail of a lower LTV band customer needs to furnish an updated valuation report in advance.

However, my reading of contract is also that tracker margins for all customers should not change after drawdown. If not in Part 1 re. start rate, then surely it's margin available at drawdown. Contract states that Bank can only raise tracker margin if not drawn down within 45 days or valuation report puts customer on different LTV band. Bank will write to confirm new margin (at drawdown). Also states that customer cannot change from one tracker rate to another (directly or indirectly) to avail of lower prevailing tracker margin.

AIB seem to argue that, although everyone under their standardised contracts (Letter of offer post March 2006) has enduring rights to a tracker option, it is only those who availed before they discontinued in Oct 2008, have rights to correct and unaltered tracker margins.

AIB are saying that it's all up for grabs again if come off tracker or do not avail of tracker, yet in contract states (for all customers) that Bank cannot raise margin after drawdown or customer cannot avail of future lower margin. Or did they mean that's only if on tracker at start or......only if are on tracker at one point or......???

AIB position seems to be down to what's offered by AIB. They are now saying if AIB were doing trackers they would offer a margin similar to (overpriced) SVR with ECB of 0%. That's certainly not what was marketed to me before entering contract.

They sold with one hand and robbed with the other. We were all made loose promises of good value mortgages, with no clear warnings that margins could change. They were the financial experts who risk assessed these outcomes of low ECB rates, yet never clearly presented this in a way to seek to inform customers.

If they did not warn customers and swallowed this risk to pedal more "good value" mortgages and help escalate prices higher, why should customers who were promised good value mortgages help offset AIB's realised low performing mortgages.....
 
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