Any chance of Banks "wriggling out" of trackers ?

Discussion in 'Tracker Redress' started by Mixednuts, 10 Apr 2010.

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  1. Mixednuts

    Mixednuts Frequent Poster

    Is there any chance of banks wiggling out of contracts for tracker mortgages , or change rates seen they are (presumably) loosing money on them ?

    My reason for asking is because my tracker mortgage (.8 + ecb )is the only reason I am not moving home.
    If I thought I could be trumped by the banks and they change rates etc for trackers then my reason for sitting tight is kinda diluted ?

  2. rosemartin

    rosemartin Frequent Poster

    i am on .75 have recently been granted a top up for extension, but this portion is at standard variabile rate. they did not try anything to get me off. was with first active, now ulster bank
  3. PatriciaFox

    PatriciaFox Frequent Poster

    I spoke with someone in banking before about Trackers and they hinted to look at the T&Cs.
    I'm not certain as I haven't looked at the T&Cs. Would they be vague enough to allow for the Tracker product to be simply discontinued/withdrawn in totality?
    I guess that would push everyone onto variable or fixed..
  4. Latrade

    Latrade Frequent Poster

    IIRC some are said to have an "exceptional circumstances" clause.
  5. DrMoriarty

    DrMoriarty Moderator

    I'm on that NIB ECB +0.5% tracker too, and repaying it as slowly as I can. The T&Cs allow NIB to convert the loan to their 'then applicable Home Loan Rate (fixed or variable as the case may be)' if I cease to keep open a current account within their 'Easy' package — which includes a fee-free option.

    I don't have to use the account for anything other than servicing my loan repayments. But if I close it, bang! :eek:
  6. jhegarty

    jhegarty Frequent Poster

    No vague phrase like that would every be upheld by a Judge.
  7. serotoninsid

    serotoninsid Frequent Poster

    Thanks for the heads up on that - I had no reason to close it but didn't know they could use it as an excuse to wrestle the tracker away from me!

    From my cold dead hands...:p
  8. elefantfresh

    elefantfresh Frequent Poster

    A direct quote from the AIB website.

    "A Tracker Rate is a set percentage (margin) above the ECB rate and so it 'tracks' changes in that rate. This margin is guaranteed for the full term of the loan unless there is a material change in the terms of the loan.

    The agreed margin as set out in the customers loan documentation will not change, even if the Bank subsequently introduces a different Tracker Mortgage offering, at a margin which may be either higher or lower than agreed as per the loan contract."
  9. Vega

    Vega Frequent Poster

    A friend was asking me about a letter he got from his bank offering to move him from a tracker to a standard variable rate, saying it might be in his interests. Surely it would not be, and surely the banks should not be sending those letters? How could it be in his best interests?
  10. aristotle

    aristotle Frequent Poster

    NIB have stated in the past that they would not look to move people onto variable mortgages even if their LTVs are now not meeting the criteria set out. It was on the front page of the Sunday Business Post over a year ago. Who knows if they may change their stance but it would be hugely difficult for them (every house would need to be independently revalued and that alone requires the houseowner to give access to the inside of their house?) and I have no doubt there would be a backlash from their customers.
  11. twofor1

    twofor1 Frequent Poster

    They did state they would not increase rates if LTV’s if went over 80%, here’s the link to that article.

    What’s to stop them just doing it on the basis that all the property price indexes state that property prices have dropped nationally by over 30% in the last 3 years? To back up their case they could even pay an auctioneer for a drive by valuation. Their Terms and conditions do not state how they determine if the LTV has gone over 80%.

    What could one do if they did do it, if you were not in negative equity and still had a good wage etc, you might be able to switch to another bank but trackers are no longer available.

    You could complain to the Ombudsman. But the bank might have a good case as their terms and conditions allow for this switch, the argument would be is a property price index and even a drive by valuation acceptable to show the LTV has gone above 80%.

    Even if you did win your case and they had to leave you with your tracker rate, they would not be to upset, as we have seen in other cases taken against banks, only a small minority would go this far but the vast majority probably would not.

    No doubt there would be unhappy customers, but look what the bank have to gain.

  12. Complainer

    Complainer Frequent Poster

    Which bank?

    Can you get the letter and post the exact wording?
  13. Shawady

    Shawady Frequent Poster

  14. NorfBank

    NorfBank Frequent Poster

    Presumably bank will offer to reduce the mortgage by €x or give the customer a lump sum in cash if the customer comes off the tracker and goes on a variable or fixed rate.
  15. NorfBank

    NorfBank Frequent Poster

    Nope but in these cash strapped times, people might jump at the chance of money now over long term savings.

    e.g the tracker will cost the bank say 50k over the remaining term versus the variable, it offers 15k to the customer in cash with the proviso that this lump sum will have to be repaid if the customer switches the mortgage or redeems it early. How many people would go for this? Say they offered 20k, 25k?

    I cannot see it happening as it would amount to the lender preying on the current misfortune of it's customers.

    IF it did happen, maybe the non state owned banks would be the first to attempt such scurrilous behaviour!

    All the above is pure speculation obviously.
  16. csirl

    csirl Frequent Poster

    I've a tracker with one of the big lenders. When house prices went through the roof, I renegotiated the rate, getting it reduced, because the increase in house prices changed the LTV - essentially I told the bank that I'd move to another lender who were offering a better rate based on the LTV. Bank reduced my rate to match the rival lender. The contract amendment that gave effect to this did not mention the LTV - it was a simple one line i.e. "in clause X, insert "rate = ecb plus Y" in place of "rate = ecb plus Z"". So even though I got a better rate based on the change in LTV, the LTV is not mentioned in the contract, so the tracker cannot be changed or cancelled due to a change in LTV. I believe that this is the norm with a lot of the big lenders.

    In summary, while you may have got a particular rate because of what your LTV was at the time you negotiated or renegotiated the loan, in most cases, there is no mention of LTV in the contract.
  17. serotoninsid

    serotoninsid Frequent Poster

    If thats what they will be offering, I think I will stick with my tracker. And it was through starting to read posts on AAM in the lead up to my house purchase that I knew the tracker deal was the one to go for - so thank you AAM! :)
  18. jinx9000

    jinx9000 Frequent Poster

  19. kkontour

    kkontour Frequent Poster

    Last year UB offered me a 2 year fixed rate of 1.95% to come off my ECB+.7% tracker.
    I ignored the letter and they rang me a few days later. I declined the offer.
    The very next day the ECB reduced their rate by a further .25%
  20. elefantfresh

    elefantfresh Frequent Poster

    On a slightly more positive note, I spoke with my bank (AIB) about 2 years ago regarding my tracker and the nice chap told me "whatever you do, stay on your tracker." I thought that was very decent of him!
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