# ptsb - when we get our trackers back, what rate will we be on?



## George12 (7 Feb 2015)

While maybe I am jumping ahead here but is the next battle going to be what tracker rate they will actually apply because my understanding would be that most of the mortgage agreements were silent on the actual tracker margin to be used. When I broke out of my fixed terms the ECB lending rate was 1% and the standard variable rate about 4%, would this mean I would be offered a margin of ECB plus 3 potentially? It would be a tracker but not necessarily a bargain! I remember times when tracker mortgages were not necessarily much cheaper than variable ones!

*Edit from Brendan to clarify *
ptsb had a few different contracts, so you will have to go back and check the actual wording of your letter of offer or mortgage contract
1) Most specified an actual rate: _The interest rate applicable to the loan will not be more than 1.1% over the ECB financing rate. _ This is absolutely clear cut. This is the rate you will get if you are entitled to be put back on the tracker.
2) Other contracts said 
_On expiry of the fixed rate period, and where the applicant chooses the option of a tracker mortgage interest rate, the interest rate applicable to the loan will be the tracker mortgage rate appropriate to the balance outstanding on the loan at the date of expiry of the fixed rate period._

So it really depends on when you came out of the fixed rate period.  In February 2011,  ptsb claimed that their tracker rate was ECB +4%.  See this thread.


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## fuzzy10 (7 Feb 2015)

George12 said:


> While maybe I am jumping ahead here but is the next battle going to be what tracker rate they will actually apply because my understanding would be that most of the mortgage agreements were silent on the actual tracker margin to be used. When I broke out of my fixed terms the ECB lending rate was 1% and the standard variable rate about 4%, would this mean I would be offered a margin of ECB plus 3 potentially? It would be a tracker but not necessarily a bargain! I remember times when tracker mortgages were not necessarily much cheaper than variable ones!


Hi George. I would expect to be returned to my original tracker rate.  + 1.5%.


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## kaza (7 Feb 2015)

fuzzy10, unless your contract specified a certain percentage I do not think you will be offered the orginal tracker rate you had. I know my didn't - my fixed rate would have ended in August 2009 and from what I have read others at this time where offered a tracker rate of 3% plus ECB - so that is what I think I will be offered (and hopefully not any higher than that). See this previous post for some examples: http://www.askaboutmoney.com/threads/ptsb-on-expiry-of-fixed-rate-tracker-rate-not-specified.172659/


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## George12 (7 Feb 2015)

Certainly Kaza's approach is very fair but does fairness come into these things, certainly not where PTSB is concerned!! My theory is there wasn't a system error which caused the problem at all. Now I admit I have never calculated what my breakage fee should have been in December 2008 in accordance with the original mortgage documentation because I don't believe there would have been one. By chance some time before I broke my fixed period I had a discussion with a PTSB staff member when I was thinking about selling the house who said breakage penalties do not apply if your fixed rate is lower than the SVR as naturally the bank would love to have you on a variable rate at that point as in their minds they are loosing money. Hence I observed the pattern of interest moves and broke my fixed period just before the SVR dropped to a level below my fixed rate so for a month paid more than what my fixed payments had been and then the SVR dropped, PTSB adjusted SVRs downwards when the ECB adjusted the rates downward but that stopped in August 2009 and my plan went really very wrong. Now my fixed rates would have ran until 2010 when the tracker margins would have been very high anyway. I am arguing that the margin to be applied should be that in December 2008. I should have been allowed to break without penalty at that point in the circumstances as outlined above and the margin to be applied should be that which applied to everybody at that point in time. I am not looking at "what would have been" but more what actually was and what should have happened.


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## kaza (7 Feb 2015)

George12 from what I can tell (simply from my research) they generally offered a tracker rate that would ensure a margin very close to their current SVR rate.

For example:

Aug 2006 (when I went to fixed from tracker)
ECB: 3%
PTSB SVR: 3.69%
My old tracker rate: 1.1% above ECB => 4.1%
Margin for PTSB to their SVR: plus .41%

I broke out fixed in Jan 2009
ECB: 2%
PTSB SVR: 4.65%
Tracker offered at the time: 2.25% above ECB => 4.25%
Margin for PTSB to their SVR: minus .4%

Actual end of my fixed in Aug 2009
ECB: 1%
PTSB: 3.65%
Tracker offered at the time: 3% above ECB => 4%
Margin for PTSB to their SVR: plus .35%

So when I look at those figures I can understand the tracker rates they offered. However, my biggest grip with this is that originally when I had my tracker, their SVR seemed to be fairly inline with the ECB rate, with a small enough margin between the two rates. However, as the ECB rate dropped, PTSB did not drop their SVR, in fact they instead raised them. PTSB SVR rate in Feb 2006 was 1.45% above the ECB - then at the start of 2009 it was 2.15% above the ECB rate and then in 2010 it jumps to 4.65% above the ECB rate.

So in my opinion PTSB have offered tracker rates inline with their (high) SVR and not in any relation to the ECB rates at the time (if that makes sense).


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## shoppergal (7 Feb 2015)

My contract said ECB +1.10%


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## matan (7 Feb 2015)

My letter of offer is tbe same shoppergal ECB + 1.10


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## fuzzy10 (7 Feb 2015)

I was offered 1.5%+ ecb in June 08.


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## kaza (8 Feb 2015)

Ok I just re-read my tracker loan offer to clarify exactly what it said. Originally I was focused on the fact that the bold part below simply said "as described above", rather that actually specified something like tracker plus 1.1%

... where the mortgagor switches the rate of this loan to a rate which is fixed.... on expiry of the fixed rate..... *loan is to revert to a tracker mortgage loan as described above.
*
So I got to wondering what exactly does "as described above" mean?

The first page, which is the Loan Offer states "*the interest rate will not exceed 1.1% over the ECB Rate*"

The attached terms and conditions firstly state "*rate does not exceed the percentage over the European Central Bank Rate as described on Loan Offer overleaf*" 

The terms and conditions then state "*the interest rate applicable on to this loan will be not more than the percentage over the ECB Rate as specified on the Loan Offer overleaf*"

So I am now thinking maybe I am entitled to ECB plus 1.1%??? Nervous to get my hopes up, but maybe I am?


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## George12 (8 Feb 2015)

That sounds right Kaza


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## Brendan Burgess (8 Feb 2015)

I have edited the opening post to clarify the issue.

*Edit from Brendan to clarify *
ptsb had a few different contracts, so you will have to go back and check the actual wording of your letter of offer or mortgage contract
1) Most specified an actual rate: _The interest rate applicable to the loan will not be more than 1.1% over the ECB financing rate. _ This is absolutely clear cut. This is the rate you will get if you are entitled to be put back on the tracker.

2) Other contracts said
_On expiry of the fixed rate period, and where the applicant chooses the option of a tracker mortgage interest rate, the interest rate applicable to the loan will be the tracker mortgage rate appropriate to the balance outstanding on the loan at the date of expiry of the fixed rate period._

So it really depends on when you came out of the fixed rate period.  In February 2011,  ptsb claimed that their tracker rate was ECB +4%.  See this thread.
There is some history of rates on this thread.


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## Brendan Burgess (9 Feb 2015)

Brendan Burgess said:


> 2) Other contracts said
> _On expiry of the fixed rate period, and where the applicant chooses the option of a tracker mortgage interest rate, the interest rate applicable to the loan will be the tracker mortgage rate appropriate to the balance outstanding on the loan at the date of expiry of the fixed rate period._
> 
> So it really depends on when you came out of the fixed rate period.



I discussed this with Padraig Kissane, who looks at it very differently. 

When you took out the mortgage, you were given documentation including an Standard Information Sheet.  If that was based on a tracker margin of 1.1% for example,  the Ombudsman may treat that as overruling what the actual mortgage contract says. 

Brendan


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## corklad (9 Feb 2015)

Brendan Burgess said:


> I discussed this with Padraig Kissane, who looks at it very differently.
> 
> When you took out the mortgage, you were given documentation including an Standard Information Sheet.  If that was based on a tracker margin of 1.1% for example,  the Ombudsman may treat that as overruling what the actual mortgage contract says.
> 
> Brendan



Unfortunately, the correspondence sheet I have from an estate agent / PTSB agent didn't have any tracker rates on it. But the contract did have that item 2 wording. I came out of a fixed at the end of the fixed period and got put on ECB + 3.25% in 2009


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## George12 (9 Feb 2015)

When I look at my standardisation sheet it says it assumes it will revert to being a tracker and when I worked it all out using the figures they used it would be a margin of 1.25%. It also says it does not constitute a legally binding offer.


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