Permanent TSB options coming off a 3 year fixed

Shaggydog said:

Hi Corklad

We got a letter back from PTSB telling us they were looking into our rate and that they would get back to us in 14 working days and gave us the Omb man details if we were not satisfied. So pending the outcome of that we will see if we need to go there.

We have a case so lets se what happens...

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Cheers again for the update. Keep them coming.

I actually was on to PTSB customer care yesterday and asked the girl I was talking to if she could explain to me how they calculated the ECB + 3.25% tracker rate when I came off the fixed last year. She first of all said it was to do with the LTV of the mortgage and the rate of the ECB at the time of the initial mortgage. I could sense she wasn't sure so she put me on hold to clarify. When she came back she said it was the LTV and ECB rate at the time of the fixed period ending. She sounded like she really didn't know exactly so I asked her could she put me on to someone who did know more.

So then her supervisor came on the line. His explanation was that even though PTSB removed tracker offers they still were running a couple of tracker rates internally for people like me whose contract demanded one coming off a fixed. These tracker margins he said were constantly changing due to the cost of funding for the bank. So when I finished the fixed the 3.25% was the tracker rate they had for my LTV (92%). He said there may also have been another (lower) rate for <80% LTV, but that was the one I was offered. It was basically the bank's interpretation of the terms and conditions of what happens at the end of my fixed period:

4. General mortgage loan approval condition 5 "conditions relating to fixed rate loans" applies in this case. The interest rate specified above may vary before the date of issue of the loan. On expiry of the rate period, and where the applicant chooses the option of a tracker mortgage interest rate, the interest rate applicable to the loan will be the tracker mortgage rate appropriate to the balance outstanding on the loan at the date of expiry of the fixed rate period. In the absence of instructions from the applicant at the expiry of the rate period, the interest rate for the loan will be the tracker mortgage rate applicable to the balance outstanding on the loan, at the date of expiry of the fixed rate period and as may be varied in accordance with variations to the European Central Bank refinancing rate.

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or more specifically this bit

On expiry of the rate period, and where the applicant chooses the option of a tracker mortgage interest rate, the interest rate applicable to the loan will be the tracker mortgage rate appropriate to the balance outstanding on the loan at the date of expiry of the fixed rate period ... and as may be varied in accordance with variations to the European Central Bank refinancing rate.

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I then asked him about the tracker margin being exceeded (basically the discussion we are having here)

I first asked if I was offered a 1% tracker, say, on my initial offer but chose to take the fixed rate, whether that tracker margin is the margin that cannot be exceeded as stated by the CCA. His answer to this was that the loan I chose was the fixed so even though the tracker may have been offered this does not come in to play and the margin over the ECB was the one offered when the fixed ended.

Next I asked about the fixed rate and whether the ECB rate at the time came in to play on this calculation. His answer here was that the ECB rate would not have been directly involved in the calculation of that fixed rate percentage, but it obviously "would have influenced the rate" as it would have been involved in the cost of borrowing calculations for the bank. I'm curious to what they say to you about this calculation as it is the nub of your argument.

There wasn't much more arguing or discussion I felt I could do at that point but at least I got their opinion out of them.

Thoughts/opinions/suggestions welcome...

Very interesting Corklad.

Seems to me they are dreaming up figures as they go along.
Am due off a fixed in Feb with same issue. Initially they said 6.7% (the SVR), when I mentioned that it was a tracker he asked how did I know! When I said it is in my loan approval letter he said the rate would be 4.85% (due to be 4.5% with the ecb drop) or a margin of 3.25%. I aksed him to clarify the margin and that is what he indicated. As with you he went away twice to consult.

Seems to me if this issue of margin and rate were probed that we could be aligned correctly with the normal trackers.

Any idea who would be able to determine the legitimacy of these margins?

I was just going though my documentation again with a fine tooth comb and spotted some more details at the end of my approval letter, after the conditions.

At the end of the fixed rate period you may exercise an option to contract for another fixed rate period or to move to the SVR or to a Tracker Mortgage Rate. If a Tracker is chosen the loan will become a tracker mortgage loan and the rate applicable will be rate appropriate to the balance outstanding on the loan at the time of the expiry of the fixed rate period and as [such?] may be varied in accordance with variantions to the ECB rate

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This may give them free license to choose the tracker rate they like...

@Shaggydog are all of these conditions I've posted the same in your approval letter at the start of the mortgage? Or do you have something different that may give you more leverage?

Fiskar said:

Am due off a fixed in Feb with same issue. Initially they said 6.7% (the SVR), when I mentioned that it was a tracker he asked how did I know! When I said it is in my loan approval letter he said the rate would be 4.85% (due to be 4.5% with the ecb drop) or a margin of 3.25%. I aksed him to clarify the margin and that is what he indicated.

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So it seems their 'internal' tracker rate margin is still at 3.25%.

Fiskar said:

Any idea who would be able to determine the legitimacy of these margins?

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I'm not sure really. I got the customer service girl to admit yesterday that they don't know anything or have anything to do with rate calculation. So it's a bit fruitless ringing them - unless they put you on to another department, which I'm guessing they won't do.

It was quite funny too when she initially was explaining (incorrectly) that the tracker margin of 3.25% was the tracker for a 92% LTV at the time the mortgage was taken out (2007). I said it was common knowledge that most people around that time were on 1% trackers and 3.25 is a bit more than 1. That really confused her.

Yes Shaggydog, please update us, I'm in the same position with PTSB.