# Confused on PTSB mention of tracker on options letter.



## Confused83 (17 Jun 2019)

Hi

I was looking for some advice on PTSB mortgage.

Taken out 2004 tracker option was in the broker list of available rates in our broker pack. Tick next to one year fixed.

We got our file via a GDPR request, I specifically asked for the original loan offer, contract, the offer letter at the end of the first year fixed, the paper work sent back the letter issued with the offer for the end of the second fixed term

 The file is all mixed up but from what I can see the contract states variable at the end of first year fixed I think?

We have the signed returned option form at the end of year 1. Tracker is listed as an option. Second fixed term was picked 5 years, but no covering letter with it it to state what would happen at end of that fixed term.

The letter with the options letter in 2011 says PTSB will contact with available options at end of fixed period if we opted to fix again but no tracker offered.

Am I correct in saying
A) That tracker wasn't chosen in 2005 that they were under no obligation to offer at end of second fix at end of 2010?
B) its unlikely the letter in 2005 would have any mention of tracker as default after end of 2nd fixed rate term?

It took alot to get the file before it went to Pepper and I dont know if it's worth trying to get the covering letter.

Thanks


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## Brendan Burgess (18 Jun 2019)

You have to read your mortgage contract which you got in 2004.   The broker correspondence is not relevant.

I don't think that the wording in 2004 gave you any rights to a tracker after the fixed rate is up and this confirms it "The file is all mixed up but from what I can see the contract states variable at the end of first year fixed I think? "

For you to have any case, it would need to say

"At the end of the fixed rate, you will be offered the the then current tracker rate". I very much doubt it contains that. 

Brendan


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## demoivre (20 Jun 2019)

Brendan Burgess said:


> For you to have any case, it would need to say
> "At the end of the fixed rate, you will be offered the the then current tracker rate"



If that one sentence covers one's eligibility for a tracker in questionable cases, you'd wonder why the Central Bank issued a framework document to banks in December 2015 which set the parameters within which the tracker review was to be conducted. Section 3.6 is particularly pertinent imo.


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## Brendan Burgess (20 Jun 2019)

Hi demoivre 

I don't really understand your point.

Are you disagreeing with me?  Do you think that the OP has some case?  If so, it would be helpful to her to spell out what that case might be. 

Brendan


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## demoivre (21 Jun 2019)

Brendan Burgess said:


> Hi demoivre
> 
> I don't really understand your point.
> 
> ...



There is not enough information in the OP to say whether or not she has a case, or whether I agree with you. If her contract states " After the fixed rate period expires you will roll to our *standard variable rate* "  she more than likely doesn't have a case but Section 3.6 of the Framework document would need to be considered..  If the OPs contract tells her, after her fixed rate period, she will roll to a variable rate , or to the prevailing variable rate, or to the variable base rate, or to a flexi annuity rate , she may have a case. Contracts are supposed to be clear. A tracker rate is a particular type of variable rate as is a standard variable rate. If , in general, Banks intended for customers to roll to a  *standard variable rate* after a fixed rate period then it's blindingly obvious to me that that's what they should have stated unambiguously in contracts. 
This is why Section 3.6 of the Framework document is so important and I personally have seen several contracts where, imo, there are breaches, by banks, of Section 3.6.


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## Brendan Burgess (21 Jun 2019)

OK, so Section 3.6 says 

_3.6 TRANSPARENCY CONSIDERATIONS

3.6.1  In the course of the Examination, and in the context of the transparency of the documentation provided to customers, the lender is to consider whether there was potential to confuse or mislead customers including, but not limited to:  
 a particular term pertaining to the loan agreement was given different meanings by the  lender at particular points in time or whether certain terms had dual meanings, with the potential to confuse customers; 
 products or interest rates were given different names with the potential to confuse customers in relation to the nature of the product or rate; 
 complicated terminology that had the potential to confuse or mislead a customer was ever used;  
 definitions of product/rate types were clearly set out, for example, in loan offers;
 terminology used by the lender pertaining to the loan agreement was consistent across  all documentation provided to a customer, for example, in both a Rate Change Authority and the Loan Offer.  _

I understand the point that you are making and it would come down to the wording. 

If a contract said "the contract states variable at the end of first year fixed I think? " that would be blindingly obvious to me that they were not intending to give her a right to a tracker. But then the opposite might be blindingly obvious to you.

I know that some people, KBC customers I think, claimed that "prevailing variable rate" meant their tracker rate. Did the Central Bank or Ombudsman agree with the customers? 

Confused - could you reproduce the actual wording in your contract so that we are not speculating.

Brendan


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## demoivre (21 Jun 2019)

Brendan Burgess said:


> I know that some people, KBC customers I think, claimed that "prevailing variable rate" meant their tracker rate. Did the Central Bank or Ombudsman agree with the customers?



I find it odd that some people believe that for a tracker to have been offered to a borrower the word tracker most appear in the contract. However these same people seem ok with a range of descriptions such as variable rate, prevailing rate, prevailing variable rate, flexi annuity rate , as meaning standard variable rate.
If the Central Bank didn't have concerns about ambiguity in mortgage contracts then why include Section 3.6 in the Framework document?
I don't think the FSPO has reached any decisions on tracker appeals yet so we'll have to wait and see.


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## Brendan Burgess (21 Jun 2019)

Hi demoivre

Variable rate includes the following 

Standard Variable Rate
Loan to Value Rate
Managed Variable Rate
Tracker rate
If a contract said that at the end of the fixed term, the borrower will be offered a variable rate - the lender meets its contractual obligations by offering any of these 4 rates.  But, _in my opinion, _the borrower cannot claim an LTV rate because the contract said that they would be offered a variable rate. 

So, yes, _in my opinion, _the contract should mention tracker for someone to expect a tracker. 

But the Ombudsman might well form a different opinion. 

Brendan


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## Confused83 (23 Jun 2019)

Thank you for the replies I will pull back out the contract and get the exact wording.


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## Confused83 (23 Jun 2019)

I have attached the wording.


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## Brendan Burgess (24 Jun 2019)

I would think that "move to a variable rate" is enough on its own to make it clear that they were not giving you an entitlement to a variable rate linked to the ECB. Offering you the Managed Variable Rate or Standard Variable Rate meets their obligations.

And just in case anyone thinks that there is some room for doubt in the above, the following line clarifies it completely.

Brendan


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## demoivre (25 Jun 2019)

Brendan Burgess said:


> would think that "move to a variable rate" is enough on its own to make it clear that they were not giving you an entitlement to a variable rate linked to the ECB. Offering you the Managed Variable Rate or Standard Variable Rate meets their obligations.



If the bank told me " At the end of the fixed rate period you may exercise an option to contract for another fixed rate period or to move to a variable rate" I would insist on a tracker rate which, as you defined yourself in #8 above is a type of variable rate. 



Brendan Burgess said:


> And just in case anyone thinks that there is some room for doubt in the above, the following line clarifies it completely.



Which line?


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## Confused83 (26 Jun 2019)

They offered a tracker in the options letter in 2006 and a fixed term was chosen again. In 2011 no tracker was offered.

I wasnt sure what the wording for tracker mortgages stated and wasnt sure if the letter in 2006 meant a tracker was intended as part of the contract.


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## Brendan Burgess (27 Jun 2019)

demoivre said:


> Which line?



There are two lines in the piece I quoted. 
The firs says "move to a variable rate" 
The line which follows that i.e. the following line, says in all caps "The payment rates on this housing loan may be adjusted by the lender from time to time"  That is absolutely clear even if they should have said "the interest rates" and not "payment rates".


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## Brendan Burgess (27 Jun 2019)

Confused83 said:


> They offered a tracker in the options letter in 2006 and a fixed term was chosen again



In other words, you declined the offer of a tracker. 

The bit you quoted makes it abundantly clear that this is not a tracker in any way, shape or form.

Brendan


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## Confused83 (27 Jun 2019)

Yes. We did as I said we have that letter and I also said I didnt know what the wording of a tracker mortgage and the purpose of the question was to understand the obligation for the end of the second fixed period. 

Thank you as always for your succinct response.


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## demoivre (5 Jul 2019)

Brendan Burgess said:


> There are two lines in the piece I quoted.
> The firs says "move to a variable rate"
> The line which follows that i.e. the following line, says in all caps "The payment rates on this housing loan may be adjusted by the lender from time to time"  That is absolutely clear even if they should have said "the interest rates" and not "payment rates".



What's absolutely clear is that lenders adjust all variable rates from time to time, not just standard variable rates. However I can see we are going around in circles and ultimately it comes down to the wording which is open to interpretation. We will have to wait and see what the Ombudsman has to say but imo for him to deny a tracker to some of the borrowers whose contracts I have seen would mean an outright dismissal of Section 3.6 of the Framework document and the Consumer Protection Code.


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