"Why do I have to make a choice between my current rate and the tracker rate?"

Brendan Burgess

Founder
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51,901
Here is the actual Mortgage Rate Instruction Form which those affected must sign and return

Tick the box beside either Option 1 or Option 2 and sign as requested to direct us to move your mortgage to a tracker rate mortgage or to tell us you want to leave your mortgage as it has operated until now.


Account Number


Mortgage Rate Instruction Form:


Tick box below to confirm that I/we wish to remain on our existing Mortgage Rate as set out below.
OPTION1
Mortgage Rate Type: Variable
Interest rate: 4.5%
Estimated Monthly repayment: €1,696

This is the interest rate that applied on this mortgage BEFOREthe application of the interim reduction communicated in this correspondence.

OR

Tick box below to confirm that I/ we wish to move to the Tracker Rate Mortgage as set out below.

, OPTION2
Mortgage Rate Type: Tracker ECB +3.25%
Interest rate: 3.3%
Estimated Monthly repayment: €1,463


**The estimated monthly repayment is calculated on the adjusted balance (where applicable). If you are on a special repayment arrangement on your mortgage, a new full repayment based on the new rate may not become due until the expiry of that arrangement.

I/we have considered the options and have read the "Standard information regarding your mortgage options" on page 11 and the details of my/our options on page 7. I/we understand that I/we have at least one month to consider the content of this letter. including the options offered. If I/we return this form before the expirv of this period. I/we understand that I am/we are waiving that one month period. or whatever time remains of that period. to consider the options above and I/we confirm that I/we have been provided with comparisons of the monthly repayments and the comparisons of the cost of credit for the rates offered.

The Instruction Form must be signed by all parties to the mortgage.
 
I asked about this at the Press Conference and they said that they were legally obliged to get the customer's permission to change to the tracker rate.

This is nonsense. It may be legally correct, but it's still Central Bank inspired nonsense.

These borrowers should have been automatically put on the tracker rate and notified accordingly.

There is no case where the borrower would be better off staying on the SVR or new Managed Variable Rates.
 
From Page 10 of the letter

"permanent tsb will introduce a new Managed Variable Rate (MVR) option for existing homeloan customers from September 2015. Existing homeloan customers including customers on Standard Variable Rate (SVR) mortgages or on Fixed Rate mortgages (subject to their terms and conditions) will be invited to apply for an MVR mortgage in which the variable rate of interest which they will pay will differ depending on the relationship between the amount being borrowed and the current value of their home. When making your mortgage rate decision. you may wish to talk to permanent tsb or seek independent advice in relation to whether the imminent availability of MVR mortgages being offered to existing homeloan customers, should be considered by you. Please note that your mortgage rate decision is not related to and will not affect your acceptance of any redress and compensation payments due to you."
 
And Page 11 complicates it further:


STANDARD INFORMATION REGARDING MORTGAGE OPTIONS

The information set out below is intended to assist you when deciding on mortgage options. Further independent information is available on the National Consumer Agency website www.nca.ie.

We strongly suggest you consult your financial advisor before making a decision regarding mortgage options.

To discuss your options with permanent tsb please contact your local branch or Freephone 1800 855 830 (or +353 1
215 1343 if you are calling from abroad) to arrange an appointment (please note that advice cannot be given during the telephone call).

Variable rates

Variable rates offer most flexibility. They allow you to increase your repayments, use a lump sum to pay off all or part of your mortgage or re-mortgage without having to pay any fixed interest rate breakage However, because variable rates can rise and fall, your mortgage repayments can go up or down during the term of your loan.

The Loan-to value (LTV) rate is a variable rate whereby the rate is related to the amount of your mortgage compared to the value of your home. The LTV rate is a variable rate not linked to the ECB rate, therefore your mortgage repayments can go up or down during the term of your loan at the discretion of the lender.

Tracker rates

This is set at a fixed percentage or margin above the ECB rate as set out in your mortgage contract. The ECB rate may vary from time to time but the percentage or margin does not change. The ECB rate may be increased or reduced from time to time by the ECB and we will apply all increases or decreases within one month from the date of the announcement by the ECB as the effective date. If we cannot use the ECB rate for this loan, we will use another reference rate for calculation that is fair and reasonable. Tracker rates provide the benefit of a guaranteed link to the ECB rate which continues over the term of your mortgage unless you decide to switch to another mortgage rate option. You may increase your repayments or use a lump sum to pay off all or part of your mortgage without having to pay any fixed interest rate breakage fee. However because the ECB rate can rise and fall your mortgage repayments can go up and down during the term of the loan.


Warning: If you choose to remain on your current interest rate and not to avail of our offer of a tracker product, you will not be contractually entitled to avail of a tracker interest rate in the future
I Warning: The cost of your monthly repayments may increase

Fixed interest rates

With a fixed interest rate mortgage, your interest rate and monthly repayments are fixed for a set time as agreed between the lender and borrower. Although a fixed interest rate means your repayments cannot increase for a set period of time, your repayments will not fall during the fixed interest rate period. As a result, you could miss out on lower interest rates and lower repayments. Fixed interest rates may cost more over the long run but they offer peace of mind as you know your repayments will not rise during the fixed interest rate period.

During the fixed interest rate period, you will face breakage fees if you want to switch lender, move to a variable rate, re-mortgage or pay off all or part of your mortgage. Also, you cannot usually pay more each month than your standard repayment. You should be aware of these conditions before you sign up to or decide to exit a fixed-rate contract.

At the end of a fixed interest rate term, you will receive an options letter from the lender outlining the mortgage rate options then available. You should respond to this options letter unless you are satisfied with the default option to be applied by permanent tsb in respect of your mortgage in the event of non-receipt of a signed option instruction. The default option will be indicated in the list of product options attached to the options letter.
 
BB it's crazy people are being sent nearly 20 pages of documentation. Did the Central bank decide this? Crazy stuff. It's going to have. 1400 people totally confused, and advisors tearing their hair out and we haven't even got to the fact people don't seem to be given the actual calculations to be able to check if they are correct. Such incompetence despite working on this for months. What were they doing.
 
Interesting how there now is a warning stating if you choose the variable rate you would not be entitled to a tracker at a later stage. Why was that omitted from our option letters In 09 when a lot of us signed over the tracker as it was more expensive.
 
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