Mars Capital did not notify me of increases in the interest rate

M

Mumof4

Registered User
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Hi everyone,
First time posting so apologies if I don’t include all information needed.
In summary myself and ex husband drew down a mortgage in 2007 with EBS for €513k. Variable rate. 30 yr Term.
Up to 2011 all was fine but we separated in 2012 and the mortgage went into arrears.
In 2016 I recapitalised with the help of IMHO and the arrears of €78k were added to the Balance. We agreed repayments of €1500 per month with an interest rate of 0.5% for 60 months. Following that the rate would return to variable and payments would increase.

Move to 2022 and my loan is sold to Mars as non performing. The new loan is upto date with no payments missed.

Yesterday I received a statement for 2022 from Mars Capital. Although the statement cover page details my interest rate as 0.5%, I am being charged monthly interest of just over €1,300. Therefore, each month pretty much all of my payment has been attributed to interest, almost €15k in the year.

Unless I am mistaken this means they have switched me to a variable rate. This is correct as the arrangement with EBS was due to expire in March of 2022 however I was never notified of the change. Is this correct? Is there no onus on Mars to inform me of the change? If I had known I would have looked to switch out my mortgage to a better rate elsewhere. Or can Mars switch to a variable rate without notifying me?

Sorry if this is a long winded post and any advice appreciated! Thank you
 
Mumof4 said:
We agreed repayments of €1500 per month with an interest rate of 0.5% for 60 months. Following that the rate would return to variable and payments would increase.
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Mumof4 said:
If I had known I would have looked to switch out my mortgage to a better rate elsewhere.
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You knew full well that your agreement lasted for 60 months.

So why did you not switch?

As it happens, as you were on a restructured mortgage, no other lender would have touched you.

So you have not lost out.

Brendan
 
You don't say what your current balance is.

But if you are being charged €1,300 interest, then that is €15,000 a year.

If your mortgage balance is €500k, then that is 3%. (It would be about 4% if your balance is down to €400k)

I would imagine that Mars Capital's variable rate is a lot higher than this. But it might not be.

You should call Mars and ask them what the interest rate is. Or tell them that the statement says that the rate is 0.5% so the interest charged should be €500k @0.5% or about €200 a month.

Brendan
 
Lenders should notify borrowers of any rate increase.

So, yes, Mars should have notified you that, in accordance with the agreement with EBS, your current agreement was ending and what the new rate would be.

They should also have increased the repayment.

They should also have notified you of any changes to the interest rate since March 2022.

As I have said, you have not lost out as a result of them not doing this.

1) Ask the question to find out what is going on.
2) Ask why you were not notified of the changes.
3) Go back to the IMHO and they may kick up a fuss with Mars and ask them to reduce the rate or wipe out the increase so far and set the new rate from now on.

Brendan
 
I'm guessing that the current capital balance is about €400,000

That would suggest you are paying the EBS variable rate.

That may suggest that the agreement you made might have the phrase "return to the EBS standard variable rate" or something similar which ties you to the EBS rates rather than any rates Mars capital come up with.

Maybe have someone with financial experience have a look at the statement and the agreement EBS made with you.
 
Brendan Burgess said:
Brendan Burgess said:
You knew full well that your agreement lasted for 60 months.

So why did you not switch?

As it happens, as you were on a restructured mortgage, no other lender would have touched you.

So you have not lost out.

Brendan
Click to expand...
Click to expand...

thanks for the comments. Can I ask why no other lender would have touched me last year? Can I not switch if I am on a restructured loan? I restructured a loan 7 years ago, have never missed a repayment and have a good salary?
 
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You were on a restructured loan - with an interest rate of 0.5%. If you could have met your full repayments, you should have exited the restructure.

If you had done so, your mortgage would still be with EBS.

Brendan
 
I didn’t realise that was the case. Restructuring was my only way of keeping the house at the time, and would it not have been very silly of me to exit an agreement where I was essentially on a tracker rate after years of paying extortionate interest rates?

I understand banks are more conservative in their lending than they were in 2006 when I drew down my mortgage, however I incorrectly assumed after 7 years of paying my restructured loan, that I would not be viewed as untouchable. If you are correct, I am now tied into Mars Capital and their interest rate until the mortgage is paid in full?
 
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