BlueButton
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Mods note: This very interesting thread began in 2012
We took out a (RIP) tracker investment mortgage in 2005 - repaying both capital & interest. We have been fortunate to have, so far, been able to make our repayments in full & on time.
The letter of offer from 2005 states, in the section called 'Special Conditions relating to Loan XXX' :
'The rate of the XXX Bank Flexible Mortgage tracks ECB rate with a margin which is fixed for the life of the Home Loan term. The margin for this Home Loan is ECB rate plus 1.65%. This margin is dependent on the amount borrowed and the value of the property to be mortgaged.'
There's no further reference to the tracker rate in the letter of offer. There's also no mention that we would be changing the contract, our entitlement to a tracker rate or that the tracker rate would be lost if we subsequently changed to a fixed or standard variable rate or the reprecussions of doing so.
In March 2010, as rates & repayments had risen and seemed to be on an upward curve, we checked the options available and were given 4 options - 3 were fixed rates over 2, 3 & 4 years approx and an Investment Flexible Variable rate.
We opted for the Investment Fixed until 31/12/2011 reverting to Standard Variable.
A synopsis of the terms Under the conditions on the Rate Change Letter of Authority are as follows:
Transfer from fixed rate to standard variable rate at the end of the term:
On the expiry of the fixed rate term I/We may, by prior notice in writing to the company, opt to choose a further fixed rate of interest for a certain period, if such an option is made available by the Company. Where such an option is not available or I/We fail to exercise the option if available, the interest rate applicable will be a rate of interest which may be increased or reduced by the company from time to time.
Transfer Authority: I/We acknowledge that my/our mortgage will be transferred to the rate I/We have selected above and that the above conditions will apply where I/We have selected a fixed rate.
It does clearly state we will revert to a Standard Variable rate. There was no mention of the tracker in the correspondance or it not being an available option at the expiry date.
The fixed rate expired on 31/12/2011 and we received correspondance from the lender advising us of this. They said 'Any borrowings you have on this fixed rate will automatically roll to the Standard Variable Rate Default Option. Alternatively you might choose a new variable or fixed rate.' We were given a number of options but no tracker rate option.
I e.mailed their Customer Services and said the options we received doesn't include a tracker rate option and asked what rate & monthly repayment would our mortgage be on a tracker?
I subsequently received a call just before xmas, from a staff member and he said we had signed up to revert to the variable rate. When I challenged him on this with regard to the terms of the Letter of Offer he said we'd changed the terms & conditions of our original mortgage when we signed up for the fixed rate. I told him I'd be checking the terms of the rate change request and the letter of offer...that's how we left it.....
Are they within their rights to nullify the tracker rate as quoted in the original Letter of Offer?
Should they have offered us the option of reverting to a tracker rate, in view of the terms of the letter of offer?
Shouldn't the implications of giving up the tracker & going fixed have been explained to us?
The change of rate letter doesn't state that it replaces or supercedes the terms of our original mortgage offer. Does our original contract not guarantee us a 'tracker rate' for the life of the Home Loan term - as stated?
Is there any point in we pushing them to put us back on a tracker?
We took out a (RIP) tracker investment mortgage in 2005 - repaying both capital & interest. We have been fortunate to have, so far, been able to make our repayments in full & on time.
The letter of offer from 2005 states, in the section called 'Special Conditions relating to Loan XXX' :
'The rate of the XXX Bank Flexible Mortgage tracks ECB rate with a margin which is fixed for the life of the Home Loan term. The margin for this Home Loan is ECB rate plus 1.65%. This margin is dependent on the amount borrowed and the value of the property to be mortgaged.'
There's no further reference to the tracker rate in the letter of offer. There's also no mention that we would be changing the contract, our entitlement to a tracker rate or that the tracker rate would be lost if we subsequently changed to a fixed or standard variable rate or the reprecussions of doing so.
In March 2010, as rates & repayments had risen and seemed to be on an upward curve, we checked the options available and were given 4 options - 3 were fixed rates over 2, 3 & 4 years approx and an Investment Flexible Variable rate.
We opted for the Investment Fixed until 31/12/2011 reverting to Standard Variable.
A synopsis of the terms Under the conditions on the Rate Change Letter of Authority are as follows:
Transfer from fixed rate to standard variable rate at the end of the term:
On the expiry of the fixed rate term I/We may, by prior notice in writing to the company, opt to choose a further fixed rate of interest for a certain period, if such an option is made available by the Company. Where such an option is not available or I/We fail to exercise the option if available, the interest rate applicable will be a rate of interest which may be increased or reduced by the company from time to time.
Transfer Authority: I/We acknowledge that my/our mortgage will be transferred to the rate I/We have selected above and that the above conditions will apply where I/We have selected a fixed rate.
It does clearly state we will revert to a Standard Variable rate. There was no mention of the tracker in the correspondance or it not being an available option at the expiry date.
The fixed rate expired on 31/12/2011 and we received correspondance from the lender advising us of this. They said 'Any borrowings you have on this fixed rate will automatically roll to the Standard Variable Rate Default Option. Alternatively you might choose a new variable or fixed rate.' We were given a number of options but no tracker rate option.
I e.mailed their Customer Services and said the options we received doesn't include a tracker rate option and asked what rate & monthly repayment would our mortgage be on a tracker?
I subsequently received a call just before xmas, from a staff member and he said we had signed up to revert to the variable rate. When I challenged him on this with regard to the terms of the Letter of Offer he said we'd changed the terms & conditions of our original mortgage when we signed up for the fixed rate. I told him I'd be checking the terms of the rate change request and the letter of offer...that's how we left it.....
Are they within their rights to nullify the tracker rate as quoted in the original Letter of Offer?
Should they have offered us the option of reverting to a tracker rate, in view of the terms of the letter of offer?
Shouldn't the implications of giving up the tracker & going fixed have been explained to us?
The change of rate letter doesn't state that it replaces or supercedes the terms of our original mortgage offer. Does our original contract not guarantee us a 'tracker rate' for the life of the Home Loan term - as stated?
Is there any point in we pushing them to put us back on a tracker?
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