# What does a tracker mortgage look like?



## 8611 (12 Jul 2014)

As in, what does it actually look like in document form?


  The context is that I got a home loan in 2005 from AIB. I always thought I had a tracker mortgage. I got the loan through a mortgage broker and I remember us discussing whether to choose to fix or not. I seem to remember the advice relating to speculation as to what the ECB would do to their rates, whether they would go up or down. I remember thinking my rate was linked to the ECB rate. 



I also remember documentation referring to the interest rate as being something plus 1% or plus 0.25 % or something like this, and my recollection is ECB + 0.25%. I can’t find this documentation now which makes me wonder if I just imagined this.


  My mortgage used to always go up or down in accordance with the ECB rate rises too. As in I'd hear on the news of a rate change and then shortly afterwards, my rate would change. So I had a tracker as far as I was concerned.


  Then in October, 2012 I get a letter from the bank saying my rate was going up. It was different from the previous letters that I got advising me of interest rate changes (which in my recollection were always after ECB moves). This one for the first time decided to inform me that “the Bank’s Standard Variable Rate was being amended”. Previously they just advised me of "the revised instalment schedule". 



I queried it with them and told them I was on a tracker. They said I wasn’t, that I was on a variable. I was shocked to be honest. 



Ultimately I asked for a copy of all documentation and had to make a data protection request, for which I had to pay.


  I’m surprised that at no point in the documentation I received does tracker or anything like that appear. I have gone through all the documents and have noted the relevant stuff below.


  I am not looking for legal advice, I’m just hoping someone with a bit of knowledge as to what the documentation relating to a tracker mortgage actually looks like who might notice something. As you can appreciate, its a lot of money at stake and I don’t put it past the bank to try and worm their way out of it if possible! I am actually a lawyer myself and while I don’t work in this area, I don’t see anything to me that suggests its a tracker unfortunately.I think I am stuck with a variable....


  In one document they have noted various things that happened during the mortgage in what is in effect a customer service narrative section. One records me querying the nature of the mortgage in 2012 – the customer service agent requests a copy of my “loo” which is obviously letter of offer and it “quotes standard variable rate”.


  The letter of offer itself doesn’t say what type of loan or rate it is, but in the appendix at “interest” it says “Interest will be calculated on a day to day basis at the Standard AIB Home Loan Rate, fluctuating, charged and compounded quarterly in arrears and payable monthly in arrears. At present the rate is 3.3% per annum. (APR 3.3%).” Again, this doesn’t seem to me to indicate a tracker as opposed to a variable.


  In Appendix B I am warned that “The payment rates on this housing loan may be adjusted by the lender from time to time”.


  The “European Standardised Information Sheet” describes the “nominal rate” as “3.3% variable”. The amount of each instalment states “Where the rate is variable the instalments will vary in accordance with the interest rate”.


  At one point there is a document which appears to be some kind of database print out – there are pages and pages of fields, one says “Payment method 4 Variable Direct”. The “Product Code” on this sheet is described as 12110006 Annuity Home Loan.


  At various stages in the account of the moneys going in and out it says things life “NEW RATE – 3.5% (BASE 3.5%)”.

  At one point, September 2005, it says “NEW RATE 3.3% (UPLIFT 0.0000)”. This is the only point at which “uplift” as opposed to just a rehearsal of “base” appears.

  In a section on the home loan application form the box “variable rate” is ticked. The only other box available is “fixed rate”. There is no “tracker” section.

  On a document entitled “Summary Mortgage Repayment Illustration” the following appears – “variable rate 3.30%” then underneath in brackets it says “(Rate + 1%). I think this might be in the context of showing you what will happen if the rate increases by 1% though. On another copy of this document “HL Variable” is handwritten on it (presumably home loan variable).

  On a document entitled “Mortgage Enquiry Response Form” in the section “rate” “variable” appears. ON a number of other copies of the same form the rate section is blank.

  On another document, entitled “tracking information” under the section “ICB” “trace” is written in.

  On another document entitled “account summary” in “rate” the word ”variable” appears.

  Anyone any ideas????


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## Brendan Burgess (12 Jul 2014)

> “Interest will be calculated on a day to day basis at the Standard AIB Home Loan Rate,..



You are on a Standard Variable Rate loan. 

If it were a tracker, it would say something like "the rate will be the ECB minimum refinance rate + 1%"


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## Branz (12 Jul 2014)

Its a variable rate loan.
What information is on your bank statements for this loan, it will show when it changes the rate being charged.
I very much doubt that you got ecb +0.25%, even in the heady days of 2005

This link may help, its not the most user friendly. http://sdw.ecb.europa.eu/reports.do?node=100000131
but it shows when the rates changed


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## Brendan Burgess (12 Jul 2014)

I think you will find this link more user friendly: 

History of ECB rate


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## 8611 (12 Jul 2014)

Thanks both of you, I'll go through my documents tomorrow and see if they correlate - can I ask though, if my loan was a standard variable, would it have tracked the ECB rate anyway? I mean did they just move their standard variable rate at the same rate as the ECB for a good few years?


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## serotoninsid (12 Jul 2014)

8611 said:


> Thanks both of you, I'll go through my documents tomorrow and see if they correlate - can I ask though, if my loan was a standard variable, would it have tracked the ECB rate anyway? I mean did they just move their standard variable rate at the same rate as the ECB for a good few years?


To an extent but note that all the banks increased their standard variable rates over the past few years whilst the ecb % rate was going downwards.


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## Branz (13 Jul 2014)

message deleted as it was wrong


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## Protocol (13 Jul 2014)

ircoha said:


> However for the tracker loans the _source_ of the funds is the ECB



This part of the statement is incorrect.

It is true that tracker mortgage rates obviously follow the ECB base rate, YES.

But it is not true that tracker mortgages were financed by funds borrowed directly from the ECB.


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## imni (13 Jul 2014)

Ring the bank and ask them to send out your original documentation.  If it says something like interest rate = ECB plus 1.25% then you have a tracker rate.

As you know a tracker is a form of variable rate but the documentation may not actually use the word "tracker".  It's definitely worth asking for your documentation from the bank and having a closer look.


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