PTSB What do do if your ptsb tracker rate is ECB + 2.25% or ECB + 3.25%

Brendan Burgess

As this is being discussed in many different threads, I am going to try to pull them altogether in one thread. Feel free to ask additional questions or correct some part of it. But don't just chat or let off steam in this thread. If you do, your post will be removed.

Why have I been put on such a high rate?
Many permanent tsb mortgage offers contained a specific tracker rate e.g. "On expiry of the fixed term, you will be put on a rate of ECB + 0.8%". However, your contract did not have this specific price promise. It said something like:

On expiry of the fixed 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.

How was this particular rate decided?
ptsb were free to set the margin as they saw fit. User Highchair has provided the following very useful information in this post.

But I broke out of the fixed rate in early February 2009, and they have put me on the 3.25% rate?

According to permanent tsb, it is not the date you broke out of the fixed rate, but the date your fixed rate was due to expire.

But before I fixed, I was on a rate of ECB + 0.8%, so I expected to be put on that after the fixed rate ended?
Unfortunately, that is not what your contract says.

I thought that the margin on a tracker mortgage couldn't change?
permanent tsb's contract only specified that you would get a tracker. They did not specify the margin until after the fixed term expired.

I am going to appeal this rate, should I hold off sending back the forms which came with the redress notification?

No. You should send back the forms immediately. You can appeal any aspect of the offer, including the rate later.
You can accept the compensation on offer from ptsb and still appeal

If I am on a rate of ECB +3.25%, maybe I should switch to another lender with a cheaper rate?

At the moment, the cheapest rate is 3.35% with AIB for an LTV of <50%. Bank of Ireland will give you a fixed rate for one year of 3.6% and 2% of the amount borrowed back. But you will roll on to their SVR of 4.5% when the one year is up.

The 3.25% is a high margin, but the fixed nature of the margin is valuable and you should think long and hard before switching to another lender who could increase rates at will.

I have seen that some people challenged this rate, and had it reduced?

Rate reduced from 3.3% to 1.73% on appeal

I suspect that the contract actually specified a rate.

How many people are affected by this?
123 customers have been put on a rate of 2.3% or 2.4%
358 customers have been put on a rate of 3.3% or 3.4%
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Brendan Burgess

Challenging the rate

Has anyone challenged this point to the Financial Services Ombudsman?

Yes, Robe had his complaint rejected.

And S2K, whose fixed term ran its natural course, reports here that the Ombudsman found against him on this point.

I brought a case against PTSB back in 2013/2014 on this topic. On drawdown of my loan I fixed for 2 years with the condition that on expiry of the term I would be offered the then PTSB tracker rate. The margin on expiry they offered was 3.25%. Long story short, the FSO found against me and in favour of PTSB.

The Ombudsman judges each case on its merits and one rejection does not create precedent. Also, these decisions were given when Bill Prasifka was the Ombudsman. Now, there is a new Ombudsman who might take a different view.

Has anyone complained about this to the Central Bank?

Not that I am aware of. The Central Bank approved the Redress Scheme in detail, so it's likely that they agree with permanent tsb on this issue.

Here are grounds suggested for challenging the rate

"It is an error by permanent tsb - I did have a rate specified in my contract"
Don't accept permanent tsb's word for it. Check your contract. If it says you are entitled to a specific rate on expiry of the fixed rate, then they will correct their error. They appear to have done this for kelmcc.

They should be using the rate when I broke out and not when the contract expired

This seems to me to be the most likely scope for reducing the high rate.
They should give the rate when the fixed rate was broken and not when the fixed rate was due to end.

The European Standardised Information Sheet (ISIS) showed a rate of 0.8%

As the High Court has already ruled on the status of the ESIS, this argument is unlikely to succeed. However Padraic Kissane articulates a different opinionin this thread:
What is the legal status of the European Standardised Information Sheet

The ptsb advisor told me that it would be 0.8% when the fixed rate was up

If you have evidence of this, then you may have a case. It's likely that you would need to have some letters or emails from ptsb. It's unlikely that the FSO would take your word against theirs.

My mortgage broker told me that it would be 0.8% when the fixed rate was up
Even if you could prove that, I doubt if it would be binding on permanent tsb.

When permanent tsb set this rate, it was set at an unfairly high rate
I deal with this in the next post. They don't appear to be out of line with permanent tsb's non-tracker rates at the time.
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Brendan Burgess

How do the tracker rates set my ptsb compare with the Standard Variable Rates they charged at the time?

They do not appear to be out of line.