NewIreland
Registered User
- Messages
- 19
Long time lurker, first time poster. Many thanks for Brendan and others for providing a very useful source of financial information.
So my query is about BOI's clawback on their 2% cashback offer and how things now stand for people like me who took out mortgages before the rules changed earlier this year to forbid such clawbacks. Do people believe such clauses are still enforceable? Why, or why not? And has anyone heard of a case of the clawback actually being imposed?
I took out a variable rate mortgage last year with BOI and availed of their 2% cashback scheme at the time. I am now interested in switching mortgage providers given the widening rate differences between BOI and pretty much everyone else.
My mortgage documents included the statement that:
However my offer letter also included the clause:
Judging by discussions here and in the media such clawbacks have become illegal due to the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 which came into force under Irish law in March this year. As a result BOI's Terms & Conditions on their cashback offer no longer include any mention of a clawback, and recent news coverage reported an explicit BOI statement to that effect:
So my question is whether the clawback clause in my mortgage is now also unenforceable?
And if I was to attempt to switch how should I broach the issue with BOI and try face them down on it if they do threaten a clawback? Are there certain questions I should look for written answers on before proceeding? Or should I just try to switch and see if the bank pursues a clawback then? I'd prefer to have clarity before proceeding.
I've cautiously raised this query over the phone with BOI but haven't got a clear answer. It's not even clear if the clawback has ever been enforced by the bank or whether it was always just been a threat to try and discourage consumers from switching to more competitive providers. I asked the Competition and Consumer Protection Commission (CCPC) to look into the issue but they said the area was a Central Bank responsibility.
So I thought I'd see if AAM can help bring any clarity to what the situation is now for customers like myself who have this clawback clause in their mortgage (which would no longer be allowed), and who now wish to switch.
If we could establish that these existing clawback clauses are unenforceable it could facilitate a flood of switchers from banks like BOI with persistently high SVR rates, which would help add further downward pressure on rates across the board.
Many thanks for any help or insights.
So my query is about BOI's clawback on their 2% cashback offer and how things now stand for people like me who took out mortgages before the rules changed earlier this year to forbid such clawbacks. Do people believe such clauses are still enforceable? Why, or why not? And has anyone heard of a case of the clawback actually being imposed?
I took out a variable rate mortgage last year with BOI and availed of their 2% cashback scheme at the time. I am now interested in switching mortgage providers given the widening rate differences between BOI and pretty much everyone else.
My mortgage documents included the statement that:
"In the case of a variable rate loan the loan can be redeemed in full at any time without penalty."
However my offer letter also included the clause:
"Where the Lender agrees to pay the Borrower an amount equal to 2% of the Loan (the 'Sum'), if the Borrower repays the Loan within 5 years of the date the Loan is drawn down, the Borrower agrees (a) to pay the Sum back to the Lender and (b) that the Lender can add the Sum to the amount it requires to redeem the Loan."
Judging by discussions here and in the media such clawbacks have become illegal due to the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 which came into force under Irish law in March this year. As a result BOI's Terms & Conditions on their cashback offer no longer include any mention of a clawback, and recent news coverage reported an explicit BOI statement to that effect:
'Asked about dropping the claw-back condition in the original cash offer, Bank of Ireland said: "In March 2016, in line with the new Mortgage Credit Directive, the terms and conditions were updated and there has been no claw-back clause in place since then."'
So my question is whether the clawback clause in my mortgage is now also unenforceable?
And if I was to attempt to switch how should I broach the issue with BOI and try face them down on it if they do threaten a clawback? Are there certain questions I should look for written answers on before proceeding? Or should I just try to switch and see if the bank pursues a clawback then? I'd prefer to have clarity before proceeding.
I've cautiously raised this query over the phone with BOI but haven't got a clear answer. It's not even clear if the clawback has ever been enforced by the bank or whether it was always just been a threat to try and discourage consumers from switching to more competitive providers. I asked the Competition and Consumer Protection Commission (CCPC) to look into the issue but they said the area was a Central Bank responsibility.
So I thought I'd see if AAM can help bring any clarity to what the situation is now for customers like myself who have this clawback clause in their mortgage (which would no longer be allowed), and who now wish to switch.
If we could establish that these existing clawback clauses are unenforceable it could facilitate a flood of switchers from banks like BOI with persistently high SVR rates, which would help add further downward pressure on rates across the board.
Many thanks for any help or insights.