AIB Did your AIB fixed rate mature in late 2008?

Brendan Burgess

If your Fixed rate period ended in late 2008 or if you broke out early from your fixed rate in late 2008, you can add the following argument to your appeal or complaint to the Ombudsman.

AIB makes this argument in their Q&A document.

During the period October 2008 to December 2013, it is estimated that the average tracker margin for PDHs would have been approximately 6.8% ...The resulting average tracker rate... would have been 7.9% for PDHs.

During this period, the actual average Standard Variable Rate was 3.3% for PDHs and, in any given year, it would always have been significantly cheaper than the estimated tracker rate.

But the average margin over the period is completely irrelevant. The only date which matters to you is what would the margin have been on the date your fixed rate ended.

They illustrate it with this graph.

They claim that the tracker rate in 2008 would have been about 5.9%.

If you accept AIB's argument that the tracker rate would have been 5.9%, what would the margin have been?

Date fixed rate endedBefore 15 October 200815 October 2008 to
12 November 2008
12 November 2008 to
10 December 2008
10 December 2008 to
21 January 2009
Tracker rate per AIB5.9%5.9%5.9%5.9%
ECB rate4.25%3.75%3.25%2.5%
Tracker margin1.65%2.15%2.65%3.4%

So, if your fixed rate ended before the 15th October and you had been offered the "prevailing tracker rate" of 5.9%, you would have had a margin of ECB +1.65%

So even using their figures, they are wrong to suggest that you did not lose out by not choosing the prevailing tracker rate.

It may have been higher than the SVR at the time, but that does not mean you wouldn't have chosen it.

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Brendan Burgess


The rate AIB gives for their SVR for October 2008 is wrong.

16/7/2008 to 22/10/2008 : 5.5%
22/10/2008 to 19/11/2008: 4.5%
19/11/2008 to 17/12/2008: 3.75%
17/12/2008 to 28/1/2009: 3.25%

From the above graph, they are claiming that the SVR was 3%.

So the graph exaggerates the gap between the SVR and what they claim the tracker rate would have been.



Registered User
Thanks Brendan

Might be an idea for someone that is appealing to mention this in the appeal?



Frequent Poster
BB we know they pulled that rate out of thin air to justify. But in order to do that they must have had a top level meeting to conjure up the rate. Would that be minuted. It might be a question for the Dail committee to ask, or a shareholder to ask at the annual AIB meeting.

As regards the standard variable rate at the time. Was this not higher than it normally would have been as the bank was trying to make money out of those it could due to their own financial mismanagment.

I think the best way to argue what a tracker should have been is another way. Look at the ECB rate prior to the crisis, say on a 10 year basis, and then look at the margins the main banks were taking. And calculate the rate from that.
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