OK guys, I had a look at one of these cases and I agree with AIB's approach.
While they explain it in a convoluted manner, this is what they did.
1) Calculate the total benefit payable under the Ombudsman's 12% write down + interest : €60,000
The interest was calculated up until the date the borrower traded up which was about 4 years ago.
2) Calculate the total benefit payable under the Central Bank Scheme
Account 1 up until the trade up @ 1.71%
- Interest overcharged
- Time Value of Money on this
- 15% Compensation on (1 +2)
- = Total Central Bank Scheme benefit: €50,000
Account 2 New mortgage at rate of 2.71%
- Interest overcharged
- Time Value of Money on this
- 15% Compensation on (1 +2)
- = Total Central Bank Scheme benefit Account 2: € 8,000
As the €60,000 payable under the Ombudsman's Scheme is higher than the combined Central Bank Scheme, they paid the Ombudsman's Scheme.
In addition
The borrower got a further €1,230 to pay for professional advice on Account 2 - which he doesn't need. So, he got €61,230
The borrower has a tracker rate of ECB +2.71%
This seems right to me.
Brendan