We took out a tracker mortgage with Ulster Bank in 2005 and fixed for five years in 2007. The form we signed stated that at the end of fixed rate term we would revert to the bank's home loan rate. Our mortgage document was clear that the ecb tracker rate was for the life of the mortgage. We made a complaint when they wrote out about a month ago outlining our options, but failed to mention the return to tracker rate. Today, we got a letter offering our tracker rate back. I think that there are probably lots of others out there that are in our situation and don't realise it. We thought we would have to go to the Ombudsman with this, but the whole thing was done in a month. I am posting this in case somebody else could benefit from our experience.
Success! Ulster reinstated our tracker mortgage after fixed period
- Thread starter Ladylouth
- Start date
Brendan Burgess
Founder
- Messages
- 53,759
Hi Lady
That is interesting.
From the limited details you have given, it seems to me that you agreed one thing in 2005 and changed that agreement in 2007. Many of these cases have been brought to the Ombudsman. Where it was made clear that the mortgage would revert to the home loan rate, the Ombudsman has sided with the banks. Where it was not clear that the person was losing the tracker, he has sided with the borrowers.
From your account of it, it seems that you knew in 2007 that you were giving up your tracker. I am surprised that they gave it back to you.
That is interesting.
From the limited details you have given, it seems to me that you agreed one thing in 2005 and changed that agreement in 2007. Many of these cases have been brought to the Ombudsman. Where it was made clear that the mortgage would revert to the home loan rate, the Ombudsman has sided with the banks. Where it was not clear that the person was losing the tracker, he has sided with the borrowers.
From your account of it, it seems that you knew in 2007 that you were giving up your tracker. I am surprised that they gave it back to you.
Hi Brendan, it was not at all clear that we were losing our tracker. What we signed said that we would revert to the home loan rate, not the svr. In fact it was very vague. Therefore our presumption was that the original home loan rate that applied on that loan would resume. The ombudsman has a case very similar in wording to ours. In his 2011 report. However, only for taking independent advice we would have accepted the banks word for it and reverted to svr instead. I am sure that there are many others who have done that.
BlueButton
Registered User
- Messages
- 32
Well done Ladylouth on getting your tracker rate back. I have posted details previously on AAM of how our letter of offer stated the ECB tracker rate was for the life of the mortgage but we too were put back on a variable rate after coming off a fixed rate.
I wrote and queried it with them but they wouldn't change us back to the tracker rate. That was several months ago and I had intended replying to them but never picked up the courage. I certainly will now - nothing to lose.
Was your mortgage residential or investment? Ours is an investment mortgage which might be treated differently to a residential mortgage.
Bluebutton
I wrote and queried it with them but they wouldn't change us back to the tracker rate. That was several months ago and I had intended replying to them but never picked up the courage. I certainly will now - nothing to lose.
Was your mortgage residential or investment? Ours is an investment mortgage which might be treated differently to a residential mortgage.
Bluebutton
Good news for you, Bluebutton! This was an investment mortgage. We also rang a few months ago and got the cold shoulder from Ulst Bank about going back on tracker rate. And again when we got our letter at end of fixed rate we rang and got same story. Our letter of complaint clearly stated that we were off to Ombudsman if we didn't t get back on tracker. look at Ombudsmans 2011 annual report, Case study 7, and most importantly read what you signed. best of luck!
Last edited:
Brendan Burgess
Founder
- Messages
- 53,759
Here is Case Study 6 from the [broken link removed]
[FONT="]S[/FONT][FONT="]w[/FONT][FONT="]it[/FONT][FONT="]c[/FONT][FONT="]hing mortgage [/FONT][FONT="]i[/FONT][FONT="]n[/FONT][FONT="]t[/FONT][FONT="]e[/FONT][FONT="]r[/FONT][FONT="]e[/FONT][FONT="]s[/FONT][FONT="]t[/FONT][FONT="] [/FONT][FONT="]r[/FONT][FONT="]a[/FONT][FONT="]t[/FONT][FONT="]e[/FONT][FONT="]s – [/FONT][FONT="]T[/FONT][FONT="]r[/FONT][FONT="]a[/FONT][FONT="]c[/FONT][FONT="]k[/FONT][FONT="]e[/FONT][FONT="]r[/FONT][FONT="] [/FONT][FONT="]M[/FONT][FONT="]o[/FONT][FONT="]r[/FONT][FONT="]t[/FONT][FONT="]ga[/FONT][FONT="]g[/FONT][FONT="]e[/FONT][FONT="]s[/FONT][FONT="][/FONT]
[FONT="] [/FONT]
[FONT="]T[/FONT][FONT="]h[/FONT][FONT="]e Complainant drew down a mortgage in January 2005 with the interest rate being the European Central Bank’s rate plus 1% (i.e. a ‘tracker’ mortgage). In late[/FONT]
[FONT="]2[/FONT][FONT="]0[/FONT][FONT="]05 the Complainant decided to fix the interest rate for a 4 year term. A dispute arose as to the interest rate that would apply to the mortgage at the end of the[/FONT]
[FONT="]4 year term; the Bank no longer offered tracker rate mortgages and therefore advised that the Complainant could only avail of its standard variable interest or a fixed interest rate mortgage.[/FONT]
[FONT="] [/FONT]
[FONT="]T[/FONT][FONT="]h[/FONT][FONT="]e Complainant referred the dispute to the FSO. She argued that the consequences of availing of a fixed rate term were not made clear, through the documentation or advice received from the Bank. She stated that she believed she could revert to a ‘tracker’ rate at the end of the fixed rate term and that the Bank was in effect ignoring the terms of the mortgage. The Bank rejected this and[/FONT]
[FONT="]s[/FONT][FONT="]t[/FONT][FONT="]ated [/FONT][FONT="]i[/FONT][FONT="]n[/FONT][FONT="]t[/FONT][FONT="]e[/FONT][FONT="]r[/FONT][FONT="] [/FONT][FONT="]a[/FONT][FONT="]lia that allowing a [/FONT][FONT="]fixed interest rate period was incompatible with the original ‘tracker’ mortgage agreement.[/FONT]
[FONT="] [/FONT]
[FONT="]T[/FONT][FONT="]h[/FONT][FONT="]e FSO examined all the documentation involved, including the mortgage agreement and the Mortgage Form of Authorisation concerning the rate to which the Complainant’s fixed rate would revert to upon expiry. The FSO considered whether sufficient information was made available to the Complainant when deciding to move from a ‘tracker’ to a fixed interest rate and whether or not the Bank provided sufficient, clear information to allow her make an informed decision.[/FONT]
[FONT="] [/FONT]
[FONT="]T[/FONT][FONT="]h[/FONT][FONT="]e FSO acknowledged the Bank’s commercial discretion to remove ‘tracker’ products from the market. However, having considered the documentation available at the time of the Complainant opting to move to a fixed interest rate, the FSO found that she could have reasonably expected to revert to the ‘tracker’ rate upon expiry of the fixed rate period. The FSO stated that the documentation was not clear and the consequences (good or bad) of moving from the tracker to the fixed interest rate for a set term were not sufficiently set out in the documentation.[/FONT]
[FONT="] [/FONT]
[FONT="]T[/FONT][FONT="]h[/FONT][FONT="]e complaint was substantiated and the FSO directed the Bank to place the mortgage on a ‘tracker’ rate backdated to the point at which the fixed interest rate period expired.[/FONT]
[FONT="]S[/FONT][FONT="]w[/FONT][FONT="]it[/FONT][FONT="]c[/FONT][FONT="]hing mortgage [/FONT][FONT="]i[/FONT][FONT="]n[/FONT][FONT="]t[/FONT][FONT="]e[/FONT][FONT="]r[/FONT][FONT="]e[/FONT][FONT="]s[/FONT][FONT="]t[/FONT][FONT="] [/FONT][FONT="]r[/FONT][FONT="]a[/FONT][FONT="]t[/FONT][FONT="]e[/FONT][FONT="]s – [/FONT][FONT="]T[/FONT][FONT="]r[/FONT][FONT="]a[/FONT][FONT="]c[/FONT][FONT="]k[/FONT][FONT="]e[/FONT][FONT="]r[/FONT][FONT="] [/FONT][FONT="]M[/FONT][FONT="]o[/FONT][FONT="]r[/FONT][FONT="]t[/FONT][FONT="]ga[/FONT][FONT="]g[/FONT][FONT="]e[/FONT][FONT="]s[/FONT][FONT="][/FONT]
[FONT="] [/FONT]
[FONT="]T[/FONT][FONT="]h[/FONT][FONT="]e Complainant drew down a mortgage in January 2005 with the interest rate being the European Central Bank’s rate plus 1% (i.e. a ‘tracker’ mortgage). In late[/FONT]
[FONT="]2[/FONT][FONT="]0[/FONT][FONT="]05 the Complainant decided to fix the interest rate for a 4 year term. A dispute arose as to the interest rate that would apply to the mortgage at the end of the[/FONT]
[FONT="]4 year term; the Bank no longer offered tracker rate mortgages and therefore advised that the Complainant could only avail of its standard variable interest or a fixed interest rate mortgage.[/FONT]
[FONT="] [/FONT]
[FONT="]T[/FONT][FONT="]h[/FONT][FONT="]e Complainant referred the dispute to the FSO. She argued that the consequences of availing of a fixed rate term were not made clear, through the documentation or advice received from the Bank. She stated that she believed she could revert to a ‘tracker’ rate at the end of the fixed rate term and that the Bank was in effect ignoring the terms of the mortgage. The Bank rejected this and[/FONT]
[FONT="]s[/FONT][FONT="]t[/FONT][FONT="]ated [/FONT][FONT="]i[/FONT][FONT="]n[/FONT][FONT="]t[/FONT][FONT="]e[/FONT][FONT="]r[/FONT][FONT="] [/FONT][FONT="]a[/FONT][FONT="]lia that allowing a [/FONT][FONT="]fixed interest rate period was incompatible with the original ‘tracker’ mortgage agreement.[/FONT]
[FONT="] [/FONT]
[FONT="]T[/FONT][FONT="]h[/FONT][FONT="]e FSO examined all the documentation involved, including the mortgage agreement and the Mortgage Form of Authorisation concerning the rate to which the Complainant’s fixed rate would revert to upon expiry. The FSO considered whether sufficient information was made available to the Complainant when deciding to move from a ‘tracker’ to a fixed interest rate and whether or not the Bank provided sufficient, clear information to allow her make an informed decision.[/FONT]
[FONT="] [/FONT]
[FONT="]T[/FONT][FONT="]h[/FONT][FONT="]e FSO acknowledged the Bank’s commercial discretion to remove ‘tracker’ products from the market. However, having considered the documentation available at the time of the Complainant opting to move to a fixed interest rate, the FSO found that she could have reasonably expected to revert to the ‘tracker’ rate upon expiry of the fixed rate period. The FSO stated that the documentation was not clear and the consequences (good or bad) of moving from the tracker to the fixed interest rate for a set term were not sufficiently set out in the documentation.[/FONT]
[FONT="] [/FONT]
[FONT="]T[/FONT][FONT="]h[/FONT][FONT="]e complaint was substantiated and the FSO directed the Bank to place the mortgage on a ‘tracker’ rate backdated to the point at which the fixed interest rate period expired.[/FONT]