Key Post The 300 Cohort - how the calculations are done

Brendan Burgess

Founder
Messages
54,757
I have looked at three separate calculations now and the principle is fairly straightforward, although AIB's letter makes it seem extraordinarily complicated.

1) They calculate how much you would get under the Ombudsman Scheme which is

  • A write down of 12%, plus
  • the interest charged on that write-down.

2) They calculate the total redress under the Central Bank Scheme which is , in simplified terms

  • the interest overcharged on the account , plus
  • Time Value of money on the overpayments - which is about 5% of the interest overcharged,plus
  • Compensation of 15% of the the interest and the TVM
3) Your total package will be the higher of 1) or 2) + €1,230 for legal advice
 
If you no longer have your mortgage, you will will get a cheque for the total package.

If you still have a mortgage, the total package will be allocated as follows

1) A reduction in the current balance of the mortgage
+
2) A cheque for the refund - less the €5,000 advance payment you received.

It's very difficult to calculate how the total package is allocated between the write-down and the refund cheque, but it's not that important. In the examples I saw, the write down was about 30% of the total package.
 
In all three cases I saw, the interest rate used for calculating what the Central Bank redress would be was 1.74%.

In all of these cases, the Ombudsman's award was higher than the Central Bank redress.
 
So what should you do now?

1) You should ask AIB to explain how they came up with the 1.74% rate.

2) You should ask for interest to be calculated on a compound basis.

If you do not get a satisfactory response, you should appeal to the Independent Appeals Panel.

3) If you wish, you can ask AIB to provide the workings for how they calculated the redress under the Central Bank Redress Scheme. This runs to several pages and is hard to understand. Given that that Ombudsman's award will be higher, there is probably not much point in going to the trouble of doing that, or the expense of asking a forensic accountant to check it.

4) The 15% compensation paid under the Central Bank scheme should be seen as a downpayment. If you were in mortgage arrears or suffered other distress as a result of their failure to offer you a tracker, you can apply to the Independent Appeals Panel for more compensation.

Brendan
 
Is there anyone with a closed account and new mortgage with AIB and then given a new rate
 
Cars510 said:
Is there anyone with a closed account and new mortgage with AIB and then given a new rate
Click to expand...
Yes. New rate applied to subsequent mortgage of 2.74%

review of current mortgage now underway under central bank scheme
 
Hi Cars

You have to apply to AIB for the tracker mover product. But they will give it to you easily enough.

Brendan
 
Apologies Brendan but could you advise me how I do that please as I have been onto tracker review helpline and she said no not entitled to it as it is a separate account. She then said she put it in as a complaint so I really don't know. Currently our lending rate is 3.15
 
I have scanned over the letter that came with original cheque and it mentions nothing either. Hopefully something comes back with the complaint. I am sorry for asking so many questions just very confused
 
Cars510 said:
I have scanned over the letter that came with original cheque and it mentions nothing either. Hopefully something comes back with the complaint. I am sorry for asking so many questions just very confused
Click to expand...
If you traded up shortly after closing your old mortgage and you took out a new mortgage with AIB they should be putting you on a tracker mover retention rate of whatever the tracker rate at the time was (that you should have been put on if part of the 300 cohort) plus 1%.

for us that figure is 2.74% (1.74 plus 1)

I wrote them a letter of complaint upon receipt of initial payment outlining my expectation of same.
 
Yes we had our original mortgage from Dec 2006- April 2014 and mortgage is with AIB. Who did you send complaint to. The woman today said she had lodged the complaint for me and that I would get receipt of acknowledgment of complaint and then they would look into it.
 
Hi Cars

They announced the product in March 2014 to be available from the summer, so it looks as if it was not available when you traded up.

AIB announcement: allowing to move with tracker

http://m.rte.ie/news/touch/business/2014/0307/600778-aib-tracker-mortgages/ 1% on top of ECB rate for duration of mortgage
www.askaboutmoney.com

It was also a requirement that you bought the new house within 6 months of selling the old house? Did you meet that requirement? If so, you could ask for it by concession but they wouldn't be under any obligation to give it to you.

If it's any comfort, you have done much better under the Ombudsman scheme than you would have done under the Central Bank scheme. Under the Central Bank scheme you would have got a refund of the interest overcharged from 2008 to 2014 which wouldn't have amounted to 12% of the balance.

Brendan
 
Thanks Brendan that could be the explanation.

Yes going by the calculations we were lucky with the 12%
 
Hello all

F

My mortgage was 375000 when I came out of my fixed rate in the October

I had a interest only payment arrangement from 2012 to 2016 after a redundancy and I retrained in another discipline

My write down was 46,812
cheque was for 16,568
And new rate is 1.74%
 
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