EBS What does an EBS "Variable Base Rate" mortgage mean?

haveaniceday

Frequent Poster
Messages
134
hey there pguyo thanks for posting these - the general conditions are attached to my variable buy to let alright- which states the interest can never go higher than the ecb rate + 1.5 % - nothing like this was attached to my homeloan offer that I can find - and I FOI'd this info from EBS and its not in that either - the info they sent out to me just references those documents i listed earlier - so I am going to go back and ask for them and see what i get ?
 

IdesofMarch

Frequent Poster
Messages
290
Well it’s not a Standard Variable Rate.
Correct, any reference to base rate in a loan offer within Europe is a reference to the ECB base rate or refi/repo rate as it is also known as. There is a large volume of evidence available on line to back this up. EBS cannot simply rename a product from variable base rate to standard variable rate where the said change affects the underlying pricing index of your loan, that would be a fundamental breach of contract.
 

B26354

Frequent Poster
Messages
258
EBS also seem to confirm here on their website in 2007(point 5) that whatever the rate prevailing on date of drawn down of the loan is the “effective rate for your loan.” My reading of that is that it should be “variable base rate”(whatever that is!)for the entirety of the loan.
 

Attachments

haveaniceday

Frequent Poster
Messages
134
There is an article in the Irish Independent - dated feb 26 2008 - called over the odds written by charlie Weston quoting head of membership business at EBS

saying 'Dara Deering has accused her rival banks of 'using standard variate rate mortgages as a lever of profitability''
I can't post links yet!
 

haveaniceday

Frequent Poster
Messages
134
so you could read from this that if she is accusing rival banks of doing this - then EBS was not - as they were only putting people on base rate mortgages i.e. trackers - my situation unfolded as follows;

I had a fixed loan offer in 2007
that showed i would be put on a base rate after three years
I then asked for a tracker not a fixed mortgage in early 2008- shortly after i got a new loan offer
and my new loan offer showed a base rate

however at some point when my rate went up and was not following the ecb i asked and was told i was on a standard variable rate - the reason given to me was that the trackers was no longer available to me when I got the loan cheque ( july 2008)- but i never signed a new loan offer ?
 

ashambles

Frequent Poster
Messages
435
I'd an EBS mortgage and asked about switch from an SVR to a tracker probably back when the tracker and SVR were the same. I assume late 2006 early 2007. I was told there was no point, because the tracker and SVR were now equivalent products. The mortgage was small at that point so I didn't care too much.

That was when they were still heavily advertising trackers, so I doubt it was a deliberate or underhand policy to stop someone from getting a tracker.
It seemed EBS thought SVRs were obsolete and all future mortgages would be trackers.

I'd like to see EBS's newspaper advertising from that time. There is a possibility they may have advertised, at the point when their SVR and tracker rates were equal, that their SVR was a tracker.
 

pguyo

Frequent Poster
Messages
80
so you could read from this that if she is accusing rival banks of doing this - then EBS was not - as they were only putting people on base rate mortgages i.e. trackers - my situation unfolded as follows;

I had a fixed loan offer in 2007
that showed i would be put on a base rate after three years
I then asked for a tracker not a fixed mortgage in early 2008- shortly after i got a new loan offer
and my new loan offer showed a base rate

however at some point when my rate went up and was not following the ecb i asked and was told i was on a standard variable rate - the reason given to me was that the trackers was no longer available to me when I got the loan cheque ( july 2008)- but i never signed a new loan offer ?

Yes we had something similar with the loan offer being fixed for 3 years and 5.25 variable base rate after that. Then the loan cheque letter stated 5.33% variable base rate. Upping the rate with no agreement.
 

Webster

Registered User
Messages
46
I'd an EBS mortgage and asked about switch from an SVR to a tracker probably back when the tracker and SVR were the same. I assume late 2006 early 2007. I was told there was no point, because the tracker and SVR were now equivalent products. The mortgage was small at that point so I didn't care too much.

That was when they were still heavily advertising trackers, so I doubt it was a deliberate or underhand policy to stop someone from getting a tracker.
It seemed EBS thought SVRs were obsolete and all future mortgages would be trackers.

I'd like to see EBS's newspaper advertising from that time. There is a possibility they may have advertised, at the point when their SVR and tracker rates were equal, that their SVR was a tracker.
EBS had a clause, where, after the fixed rate period expired, the mortgage would default to the variable base rate. A variable base rate is a tracker rate as already indicated. The mortgage does not have to state the margin above the ECB base rate that the tracker will follow (same with some AIB, KBC, PTSB mortgages) This margin can easily be calculated by subtracting the ECB base rate from the interest rate been charged on the variable base rate when the fixed period ended. This margin should stay the same. Then I believe EBS identified the value of tracker mortgages given to borrowers (and the cost of these trackers to the net margin of the bank) and subtly changed the variable base rate mortgage (a tracker mortgage which borrowers has contracted into and which track the ECB base rate) to the standard variable rate(SVR). The price gouging then began.
 
Last edited:

B26354

Frequent Poster
Messages
258
I'd an EBS mortgage and asked about switch from an SVR to a tracker probably back when the tracker and SVR were the same. I assume late 2006 early 2007. I was told there was no point, because the tracker and SVR were now equivalent products. The mortgage was small at that point so I didn't care too much.

That was when they were still heavily advertising trackers, so I doubt it was a deliberate or underhand policy to stop someone from getting a tracker.
It seemed EBS thought SVRs were obsolete and all future mortgages would be trackers.

I'd like to see EBS's newspaper advertising from that time. There is a possibility they may have advertised, at the point when their SVR and tracker rates were equal, that their SVR was a tracker.
There are points between 2004-2007 where EBS were only offering trackers or fixed mortgages & SVR’s were not available so there’s a possibility they were trying to phase out SVR’s until the sh*t hit the fan in mid 2008. That’s when they started to alter interpretations of contracts and increase rates & margins on SVR’s or any rate that could be even loosely interpreted as an SVR.

Worth noting that posters on here with the EBS variable base rate definition have confirmed that SVR’s were not advertised on additional documentation they received when taking out the mortgage.
 

B26354

Frequent Poster
Messages
258
Yes we had something similar with the loan offer being fixed for 3 years and 5.25 variable base rate after that. Then the loan cheque letter stated 5.33% variable base rate. Upping the rate with no agreement.
Pugyo-at the very least you have an argument that you should have been moved onto a tracker with a margin of +1.33 (4.00 ECB base rate + 1.33 at time of draw down).
 

pguyo

Frequent Poster
Messages
80
Yes the Cheque Issue letter states After 3 years the interest rate will be : Variable Base Rate (currently 05.33%)(APR5.4%)
If only we had a tracker +1.33 for the last number of years.
 

RedOnion

Frequent Poster
Messages
3,288
Correct, any reference to base rate in a loan offer within Europe is a reference to the ECB base rate or refi/repo rate as it is also known as.
Where is the legal basis for this coming from? I'm not saying you're wrong, but you're very absolute in your comments on this, so checking there is a basis before getting up the hopes of people on this rate.

If we look at the UK as an example (I know they're not in Euro, but we follow a lot of the legal terms and definitions), the main retail banks define their own base rates. Barclays is an example:
"Barclays Bank Base Rate typically follows the Bank of England Base Rate – but it is not guaranteed to do so. "

Here, AIB have a quoted ''base lending rate" which is defined as:
"The AIB Base Lending Rate is an Interest Rate which is reviewed and
determined weekly and becomes effective from the first business day
of the following week. It is determined by reference to the three-month
Euribor rate, reflecting a daily average of this rate over the three
previous months. It will then be rounded to three decimal places. AIB’s
Base Lending Interest Rate is quoted to customers on a 365-day count
basis."
 

haveaniceday

Frequent Poster
Messages
134
ok now i have found an email from my broker to me in Jan 2008 -the subject line of the email is 'VARIABLE OPTION'

and the only rate listed on the page is


E.B.S.

Tracker (New & Existing Business)

LTV 95%

APR 5.30%
 

haveaniceday

Frequent Poster
Messages
134
when he sent me ( email above) this i asked him what the variable rate was and he replied;

The ‘Tracker’ is a variable rate and is the best one available. The other variable rate option is 5.25%.
 

haveaniceday

Frequent Poster
Messages
134
4 days later the broker sent a fax to ebs request a tracker mortgage for me - a new offer was sent with exact same wording - base rate variable mortgage and the fixed option was removed?
 

B26354

Frequent Poster
Messages
258
ok now i have found an email from my broker to me in Jan 2008 -the subject line of the email is 'VARIABLE OPTION'

and the only rate listed on the page is


E.B.S.

Tracker (New & Existing Business)

LTV 95%

APR 5.30%
when he sent me ( email above) this i asked him what the variable rate was and he replied;

The ‘Tracker’ is a variable rate and is the best one available. The other variable rate option is 5.25%.
Haveaniceday-So just to confirm;on foot of this e-mail from your broker, your home loan offer that followed contains a rate that is defined as “variable base rate(currently 5.25)”? And you understandably believed this to be the tracker option proposed to you by your broker?
 

RAzvan R

Frequent Poster
Messages
54
Hi RedOnion,
The legal basis is coming from EBS Home Loan Repayment Type/Main loan aplication where is clear that, EBS did not have SVR available as an repayment options to customers.
There were 4 repayment options:
1 Fix rate (preavailing Variable Base),
2 Tracker (for life of the loan, with option to change once without penalty to Fix rate Or SVR)
3 Easystep (deferred payment for first Year...)
4 Flexypayment (self build interest only).
SVR did not exist as a repayment option for customers or advertise in any form.
Press release of EBS oficials is another legal basis.
AIB/EBS CEO BB press release regarding SVR and ECB as per @B26354 thread.
AIB was transfering their SVR policy statetment & conditions in late 2010 early 2011.
My home loan contract and the same as all the people in this thread is with EBS not with AIB.
Therefore AIB can change whatever they want, I dont realy care.
With all respect RedOnion I’m just curios because you seem very negative in all EBS threads.
Do you ever work with EBS or do you ever represent their interest?
Or maybe I’m wrong and you just try to advise people following on legal requirments.
 
Last edited:
Top