# Return of UB Tracker letter



## MiseÉire (25 May 2014)

Hi all,
Having myself (with much help from AAM) been offered a return of a tracker I helped my friend in similar circumstances to look for his back. Following the usual toing and froing he got a letter offering "on an exceptional basis and as a gesture of good will" (even though the bank did nothing wrong!), his tracker back and have it backdated to 2009. They go on to say they will calculate the difference between the payments they should have collected if the repayments had been based on the tracker and the actual payments collected which he may avail of as a refund. 
However, the next paragraph states "please note however that if you avail of a refund of the overpaid amount, you will in effect be removing the overpayment from your account and as such, the balance of your account will increase accordingly. Alternatively you are free to leave the overpaid amount on the account meaning the outstanding balance will not change."
Reading other threads would suggest that he should be taking the money out and enjoying a tracker rate of 1.30% for as long as possible.
Is this an effort by the bank to have him leave the refund in his account and thereby reduce the term of the loss making tracker for them or have we missed something. I would appreciate any help. Thanks


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## Dermot (25 May 2014)

Congratulations on both situations.
There is nothing particularly wrong in the letter from UB.  They are just pointing out the facts.  Nothing more or less.
As regards your friend does your friend have something useful to do with the refund other than leave it on deposit where rates are extremely low particularly after Gov taxes.  Have they any other money free for emergencies.
It is totally dependent on the preference of your friend on what they do.  The mortgage term will not change.  It will be the repayments that will change which will depend what your friend opts for.  The amount of the repayments will not vary that much at the moment given the low tracker rate.  As I stated before it depends on what your friends needs are.


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## MiseÉire (25 May 2014)

Thanks for the reply Dermot. I would have thought that he should take the money out of the mortgage account and put it on deposit somewhere as 1.30% is very cheap money. I'd say he would be covered for rainy day fund. I presumed that his repayments would decrease significantly and that he will get a sizeable refund having been paying 4.65% since 2009 which will be reduced to 1.30% and backdated. He has around 110k outstanding. I still do not fully get why if he has been over paying interest for a period of almost 5 years that the balance of the account will increase if that overpaid interest is refunded.


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## Dermot (25 May 2014)

I am just giving a 2 second mental calculation that the refund will be about 10 - 12k as the tracker was not always as low over the period as it is now.  If they refund is taken it will increase the balance that is outstanding as against leaving it there and reducing the balance.
Another way of putting it would be that if the balance now outstanding before the refund is 110k and if your friend leaves the refund in place it should reduce the balance to roughly 100k to be paid at the 1.3% rate. If the refund is taken your friends balance would be 110k to be paid at the 1.3% rate.
That is my take on how it should be calculated.
Make sure and clarify all this with UB and request how the calculated the difference.


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## MiseÉire (25 May 2014)

Thanks Dermot. That seems to explain it better. I think their wording is a bit confusing. I wonder is that deliberate? My suggestion to him will be to request clarification from bank and to insist that the refund is paid to his current account rather than taken off the mortgage. Thanks for taking the time to reply.


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## Dermot (25 May 2014)

I would take the view that it is not terribly well worded.  As for it being deliberate I cannot say other than they hardly can deny the logic of mathematics.


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