AIB Tracker mortgage review Nov 2021

B

Bonnylov

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Has any other AIB customers received a letter
From AIB to advise they made a mistake?
We moved house jan 2018 and lost our tracker mortgage. AIB now advise (nov 21) we should have been offered TIRR at 1.6%
We have received a letter (feb 22) stating the diff between what was repaid each month and what would have been paid is 1500, and interest over changed is 2500 approx.
So their solution is to reduce our mortgage by (2500-1500)= 1000 and pay us a cheque 1500. Net payment 2,500

What am I missing? Put simply why would we not receive both overpayments 2500 + 1500?

Then a further letter (apr 22) advising the interest rates printed on letter were rounded to nearest number by mistake but no difference to repayments.

Any help from people in same position or someone with experience would help greatly.
Thanks
 
Hi Bonny

AIB is correct.

It is explained fully here

FAQ - Calculating the refund when a tracker is restored

Update 3rd January 2018. Different banks have different approaches. This is how ptsb does it. This has come up a few times, and it's hard for people to understand the process. If they don't understand the process, it's difficult for them to be confident that the lender is doing it right...
www.askaboutmoney.com

In summary, you were charged €2,500 more interest.

But your repayments were only higher by €1,500 than they would otherwise have been.

Your mortgage balance is also €1,000 higher.

So the way to correct this is to give you back your overpayments and to reduce your balance.

Brendan
 
Thank you Brendan,
Good to know it’s a verified process, I will still revert as they did change me back to the 1.6 % interest rate, but calculated the overpayments on a 2.32 % rate,
The letter doesn’t explain where this came from.
I would expect them to use the prevailing tracker rate which was .6 , they have added 1% to this , but the 2.32 doesn’t make sense to me.
So I will reply to them and ask or further details on this rate

Thanks for explanation and reference.
 
OK, this is what happened.

You had a tracker from AIB at 0.6%.

If you had bought your new home with a BoI mortgage, there would be no issue.

But AIB offered its tracker customers a tracker porter product. You could port the remaining balance to your new mortgage at the old margin + 1%. So 1.6% is the correct rate.

I don't understand the 2.32% either.

Brendan
 
Sending the letter today so will update when I get an explanation in case others are dealing with same issues.
Thanks again.
 
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