# Wrong LTV Rate after coming off Fixed (part of the cohort)



## David_Dublin (9 Jul 2020)

Hi All,

We've had our capital balance reduced, we're delighted.

Now I am wondering whether we should pursue the fact that AIB put us on the wrong LTV rate when we went from Fixed to SVR in 2011. Details below:

We split our mortgage, half tracker, half fixed (3 yrs, from 2008)
Checking mortgage documentation, the Tracker Loan offer was based on LTV rate <= 50%, per the "Interest Rate Description" on the loan offer, so AIB had our total borrowing <= 50% LTV
When we went onto SVR in 2011, they put us on the standard SVR, no account of our low LTV
As part of the BDO appeal, we included a complain in relation to being put on the incorrect variable rate
The BDO Appeal Section 3 states: "Our records indicate that the Bank wrote to the Customer.....with a sample of rates available...including Fixed, Variable and LTV Variable, and in the absence of a reply the SVR would have been applied
We have no copy of this letter, and none was provided by AIB in the information request, nor in the BDO copy of all our documents
In 2017 I contacted the bank to request the <- 50% LTV, we paid for a valuation and the rate changed from 3.1% to 2.75% applied 1st November 2017
Is it worth pursuing AIB for the difference between the <=50% LTV rate and the SVR rate for the 6 years?

Thanks,

David


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## Brendan Burgess (9 Jul 2020)

Did the Appeals Panel rule on your appeal?   Did they refer to this aspect of it?

So you had a fixed rate mortgage which expired in 2011.

AIB wrote to you and asked you to choose a rate option.  The letter would have said "In the absence of a choice, the mortgage will default to the Standard Variable Rate" 

You did not make a choice, so they charged you the SVR. 

It is very likely that this letter was sent to you and you just ignored it.  A lot of people do.

If you have a letter which was sent to you that says something else, then fine. 

But AIB should have a copy of the letter. It's quite possible that they just have the generic letter that was sent.  But they should provide you with a copy of that as well. 

Wait until you get the redress letter from AIB and see what the appeal/complaint mechanism is. 

This is the relevant clause in your contract 
*3.2    FURTHER FIXED INTEREST RATE OPTIONS/CHOICE*

At the end of any fixed interest rate period, the Customer may choose between: (a) a further fixed interest rate period, or

(b)    conversion to a variable interest rate Mortgage Loan, or

(c)      conversion to a tracker interest rate Mortgage Loan,

at the Bank's then prevailing rates appropriate to the Mortgage Loan. If the Customer does not exercise this choice, then the Mortgage Loan will automatically convert to a* variable interest rate Mortgage Loan.*

I would claim that to mean the rate appropriate to your LTV and not automatically the SVR. 

Brendan


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## David_Dublin (9 Jul 2020)

Brendan Burgess said:


> Did the Appeals Panel rule on your appeal?   Did they refer to this aspect of it?
> 
> So you had a fixed rate mortgage which expired in 2011.
> 
> ...



Thanks for the reply Brendan.

BDO ruled on it, they said "it defaulted to the *standard variable rate*....as [we] had not selected a rate at the end of their fixed rate period....in accordance with the Letter of Offer", and goes on to say "The Customers were not entitled to automatically convert to a LTV Variable rate product".

As you point out, the letter of offer doesn't say it reverts to the *standard variable rate*, it states: "at the Bank's then prevailing rates *appropriate* to the Mortgage Loan".

I've no record of them offering the LTV options, and neither AIB nor BDO provided a copy of this. I'll ring and ask for a copy of the letter. If they sent a letter and it included an LTV Variable Rate, then there is more a case for mea culpa. Even still, your point remains valid: "I would claim that to mean the rate appropriate to your LTV and not automatically the SVR."

I did a calc on what the cost might be, based on 6 years of being charged 3.1% rather than 2.75% on 200k, and it comes out as over 2k, so it is definitely worth looking into if the calc is correct (did it by using an online mortgage calculator, compared the cost of credit for term of 6 years with the 2 different rates, so its probably not the right aproach at all, the 2 rates are per what the rates were when we were put on the LTV, just as an example of the difference).

Anyhow, as you recommend, I'll wait until until I get the redress letter and see what the appeal/complaint mechanism is.


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## David_Dublin (27 Aug 2020)

Complaint submitted, sent it in with the Payment Form that came in the post today. I didn't mention the simple/compound interest issue in my complaint, I saw a post by Brendan advising that he was looking into it, and any remedy would be applied to all if successful.

So hopefully now due 3 cheques:

Interest refund
Interest refund adjustment for simple versus compound interest
Interest refund for having put us on SVR rather than an LTV product appropriate to our mortgage
1 - should be immediate.
2 - should be a no brainer, will be interesting to see the outcome, and if successful, how long it takes
3 - I'm not particularly confident, seems to be fair, make sense, but I am sure they will reject it, in which case I will need to go to FSPO presumably


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## David_Dublin (16 Oct 2020)

Still no outcome from this complaint, they wrote in September to say the matter remains under investigation.

For anyone else that might want to issue a complaint about this, I've attached a redacted version of the letter of complaint I sent in.

(re the above, 1. has been received; 2. won't be, as I understand it)


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## Brendan Burgess (16 Oct 2020)

David_Dublin said:


> I've attached a redacted version of the letter of complaint I sent in.



No you haven't.


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## David_Dublin (16 Oct 2020)

Brendan Burgess said:


> No you haven't.


Pretty sure I had @Brendan Burgess as I saw the thumbnail of the doc on screen so maybe some website gremlins, but have added it (again?) anyhow.


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## Brendan Burgess (16 Oct 2020)

David_Dublin said:


> some website gremlins



Could be. But user error is far more likely.  I often forget attachments. I don't blame the system. I blame myself.

Brendan


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## David_Dublin (3 Nov 2020)

Anyone know how long is too long for them to consider a complaint? 2 and a half months later and nothing but holding letter. And the one that says I can go to FSPO now if I want.


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## tnegun (3 Nov 2020)

I got the same letter but its nonsense you need a final response from AIB before taking it to the FSPO. I couldn't find a time limit for the Final Response to be issued just times around acknowledging and that update letters must be send but nothing specific for issuing the Final Response like in the UK.


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## David_Dublin (23 Apr 2021)

Complaint rejected, going to leave it there as I haven't the energy to bother any more with it.


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