Post-Redress - Considering fixing and Clause 3.2

We were part of the wider Tracker scandal (tracker was returned to us, compensation etc). Since we have been enjoying, like a lot of people, the low rates being back on a tracker has afforded us. But as rates rise we are assessing our options - stick with the tracker or fix.

In our contract we have clause 3.2, giving us the option to return to a tracker rate after a fixed rate period. The catch is that rate is referred to as ‘the bank’s then prevailing rate (appropriate to the Mortgage Loan)’

Firstly, does anyone know what tracker rate AIB would offer us after a fixed rate if we decided to go that route?

And secondly, seeing as the clause refers to the prevailing rate as ‘appropriate to the mortgage loan’ and the mortgage loan itself was found to be flawed/illegal etc, (however it should be referred to vis-a-vis the tracker scandal.) what impact might that have?

Has anyone have recent experience of similar?

Thanks

If it specifically says Tracker Rate in clause 3.2 I would say this is ok however, I would ask them to clarify in writing that this is the case, and what the % over ECB tracker would be. I would say the 'appropriate' reference means things like Loan To Value etc. so that could tie in with the % over ECB tracker available.

danika05 said:

In our contract we have clause 3.2, giving us the option to return to a tracker rate after a fixed rate period. The catch is that rate is referred to as ‘the bank’s then prevailing rate (appropriate to the Mortgage Loan)’

Click to expand...

@danika05 In this post, @Brendan Burgess warns:

Brendan Burgess said:

Some AIB mortgage contracts, and maybe some others, allow you to return to your tracker after fixing
In most cases, when you fix, you lose your right to your tracker. But if your mortgage contract is crystal clear, then you could consider fixing. But it must be crystal clear and the margin must be specified "At the end of any fixed rate period, you will have the option of returning to the tracker rate specified in Condition... " Get it in writing from your lender that you can return to this actual rate. Some contracts say "You will be offered a tracker at the then prevailing rate" . That is no good to you, as the prevailing margin at that time, may well be 3.5%.

Click to expand...

It sounds like your contract is of the type that Brendan is warning about, and you would not be able to return to a "good" tracker rate at the end of your fixed-rate period.

I think that the current prevailing AIB tracker margin is 3.5%.

You should fix.

Brendan