# "Why do I have to make a choice between my current rate and the tracker rate?"



## Brendan Burgess (30 Jul 2015)

_Here is the actual Mortgage Rate Instruction Form which those affected must sign and return_

Tick the box beside either Option 1 or Option 2 and sign as requested to direct us to move your mortgage to a tracker rate mortgage or to tell us you want to leave your mortgage as it has operated until now.


Account Number


Mortgage Rate Instruction Form:


Tick box below to confirm  that I/we wish to remain on our existing Mortgage Rate as set out below.
OPTION1
Mortgage Rate Type: Variable
Interest rate: 4.5%
Estimated  Monthly repayment: €1,696

This is the interest  rate that applied on this mortgage BEFOREthe application of the interim  reduction communicated in this  correspondence.

OR

Tick box below to confirm  that I/ we wish to move to the Tracker Rate Mortgage as set out below.

,  OPTION2 
Mortgage Rate Type: Tracker  ECB +3.25%
Interest rate: 3.3%
Estimated  Monthly repayment: €1,463


**The  estimated monthly repayment is calculated on the adjusted balance (where applicable). If you are on a  special  repayment arrangement on  your  mortgage, a new  full  repayment based on  the  new  rate  may  not  become due  until  the  expiry  of  that arrangement.

I/we have considered the  options  and  have read the  "Standard information regarding your  mortgage options" on page 11  and the details  of my/our options  on page 7. I/we understand that I/we have at least one month  to consider the content  of this  letter.  including the options  offered. If I/we return  this form  before the expirv  of this  period. I/we understand that  I  am/we are waiving that one month period. or whatever time remains of that  period. to consider the options  above  and I/we confirm  that I/we have been provided with  comparisons of the monthly repayments and the comparisons of the cost of credit for the rates offered.

The Instruction Form must be signed by all parties to the mortgage.


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## Brendan Burgess (30 Jul 2015)

I asked about this at the Press Conference and they said that they were legally obliged to get the customer's permission to change to the tracker rate. 

This is nonsense.  It may be legally correct, but it's still Central Bank inspired nonsense. 

These borrowers should have been automatically put on the tracker rate and notified accordingly.

There is no case where the borrower would be better off staying on the SVR or new Managed Variable Rates.


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## Brendan Burgess (30 Jul 2015)

From Page 10 of the letter 

"permanent tsb  will  introduce  a  new  Managed  Variable  Rate  (MVR)  option  for  existing  homeloan customers  from  September  2015.  Existing  homeloan  customers  including  customers  on  Standard Variable  Rate  (SVR)  mortgages  or on  Fixed  Rate  mortgages  (subject  to their  terms  and  conditions) will be invited  to apply for  an MVR  mortgage  in which  the variable  rate  of interest  which  they  will pay will differ  depending  on the relationship  between  the amount  being  borrowed  and  the current  value of their  home.  When  making  your  mortgage  rate  decision.  you  may  wish  to talk  to permanent tsb  or seek  independent  advice  in  relation  to whether  the  imminent  availability  of  MVR  mortgages  being offered  to  existing  homeloan  customers,  should  be  considered  by  you.  Please  note  that  your mortgage  rate  decision  is  not  related  to  and  will  not  affect  your  acceptance  of  any  redress  and compensation  payments  due to you."


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## Brendan Burgess (30 Jul 2015)

And Page 11 complicates it further: 


STANDARD  INFORMATION  REGARDING  MORTGAGE  OPTIONS

The  information  set  out  below  is  intended  to  assist  you  when  deciding  on  mortgage  options.  Further  independent information  is available  on the National  Consumer  Agency  website  www.nca.ie.

We strongly suggest you consult your financial advisor before  making  a  decision regarding mortgage  options.

To discuss  your  options  with  permanent tsb  please  contact  your  local  branch  or Freephone  1800 855 830  (or +353  1
215 1343 if you are calling  from abroad)  to arrange  an appointment  (please  note that advice  cannot  be given during  the telephone  call).

Variable  rates

Variable  rates offer  most flexibility.  They  allow  you to increase  your repayments,  use a lump  sum to pay off all or part of your mortgage  or re-mortgage  without  having  to pay  any fixed  interest  rate  breakage  However,  because  variable  rates can rise and fall, your mortgage  repayments  can go up or down  during  the term of your loan.

The Loan-to  value  (LTV)  rate is a variable  rate whereby  the rate  is related  to the amount  of your mortgage  compared  to the value  of your home.  The LTV rate is a variable  rate not linked  to the ECB rate, therefore  your mortgage  repayments can go up or down  during  the term of your  loan at the discretion  of the lender.

Tracker  rates

This is set at a fixed  percentage  or margin  above  the ECB  rate as set out in your  mortgage  contract.  The  ECB rate may vary from  time to time but the percentage  or margin  does not change.  The  ECB rate  may be increased  or reduced  from time  to  time  by  the  ECB  and  we  will  apply  all  increases  or  decreases  within  one  month  from  the  date  of  the announcement   by  the  ECB  as  the  effective  date.  If we  cannot  use  the  ECB  rate  for  this  loan,  we  will  use  another reference  rate  for calculation  that  is fair  and  reasonable.  Tracker  rates  provide  the  benefit  of a  guaranteed  link  to the ECB rate which  continues  over the term of your mortgage  unless  you  decide  to switch  to another  mortgage  rate option. You may  increase  your  repayments  or use a  lump sum to pay off all or part  of your  mortgage  without  having to pay any fixed interest  rate breakage  fee. However  because  the ECB rate can rise and fall your mortgage  repayments  can  go up and down  during  the term of the loan.


Warning:  If you choose to remain  on your  current interest rate and not to avail of our offer of a tracker product, you will not be contractually entitled to avail of a tracker interest rate in the future
I  Warning: The cost of your  monthly repayments may increase

Fixed interest rates

With  a  fixed  interest  rate  mortgage,  your  interest  rate  and  monthly  repayments  are  fixed  for  a  set  time  as  agreed between  the  lender  and  borrower.  Although  a  fixed  interest  rate  means  your  repayments  cannot  increase  for  a set period  of time,  your  repayments  will  not  fall  during  the  fixed  interest  rate  period.  As  a  result,  you  could  miss  out  on lower interest  rates and lower  repayments.  Fixed interest  rates may  cost more over the long  run but they offer peace  of mind as you know your repayments  will not rise during  the fixed interest  rate period.

During  the  fixed  interest  rate period,  you  will face  breakage  fees  if you want  to switch  lender,  move  to a  variable  rate, re-mortgage  or pay off all or part of your  mortgage.  Also, you  cannot  usually  pay more  each month  than your  standard repayment.  You should  be aware  of these  conditions  before  you sign up to or decide  to exit a  fixed-rate  contract.

At the end  of a  fixed  interest  rate  term,  you  will  receive  an options  letter  from  the  lender  outlining  the mortgage  rate options  then  available.  You  should  respond  to this  options  letter  unless  you  are satisfied  with  the default  option  to be applied  by permanent tsb in respect  of your  mortgage  in the event  of non-receipt  of a  signed  option  instruction.  The default option  will be indicated  in the list of product  options  attached  to the options  letter.


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## Bronte (30 Jul 2015)

BB it's crazy people are being sent nearly 20 pages of documentation.  Did the Central bank decide this?  Crazy stuff.  It's going to have. 1400 people totally confused, and advisors tearing their hair out and we haven't even got to the fact people don't seem to be given the actual calculations to be able  to check if they are correct.  Such incompetence despite working on this for months.  What were they doing.


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## random2011 (30 Jul 2015)

Interesting how there now is a warning stating if you choose the variable rate you would not be entitled to a tracker at a later stage. Why was that omitted from our option letters In 09 when a lot of us signed over the tracker as it was more expensive.


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