# "New hope for borrowers in variable rate nightmare"



## Brendan Burgess (14 Feb 2015)

Charlie Weston has a front page article in today's Indo 

New hope for borrowers in variable rate nightmare

Last Wednesday, the Court of Appeal heard the appeal by the Ombudsman against the High Court's ruling in the Millar complaint against Danske over the high Standard Variable Rate as reported on Askboutmoney at 
*High Court tells Ombudsman to look at Danske Bank's rate increase*

_The three judges in that court reserved judgment, which means they will provide a written decision at a later date.

Success for the Millars will have massive implications for around 320,000 homeowners on variable rates, and another 60,000 buy-to-let investors.

The case was heard before Mr Justice Peter Kelly, Ms Justice Mary Finlay Geoghegan and Mr Justice Michael Peart this week.

Founder of the Askaboutmoney.com website Brendan Burgess said: "The banks are scared stiff that the High Court judgment, which found against the ombudsman, will be upheld by the Court of Appeal.
"The implications for this are huge. It could affect almost everyone with a variable rate mortgage."

Barrister David Langwallner, who represented the Millars, said the case has huge implications.

"It will be a precedent-setting judgment, as it will regulate the banks' capacity to vary standard variable rates, if there is a qualifying ability to vary rates in the contact.

"And it will regulate the extent of the judiciary's ability to review the decisions of the financial services ombudsman._


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## Deisce (14 Feb 2015)

Nice pipedream. But the establishment could never let this happen, could they? Should I hire a lawyer?


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## Bronte (14 Feb 2015)

Deische how could you hope to pay a lawyer.  Courts are only for the broke or the wealthy in Ireland.  Empathise with your comment on the establishment.

That article makes my blood boil, why is the ombudsman siding with the bank in the appeal.  How biased is that, is he not meant to be on the side of the little guys.  Why didn't he let the bank take the case and avoid wasting taxpayers money on an appeal.

I see poster Padkiss is also quoted in the article, he's great the way he keeps battling away.


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## Brendan Burgess (14 Feb 2015)

Bronte said:


> why is the ombudsman siding with the bank in the appeal. How biased is that, is he not meant to be on the side of the little guys. Why didn't he let the bank take the case and avoid wasting taxpayers money on an appeal.



Hi Bronte

Discussed here: 
*Why is the F.S.O. appealing the Millar case ?*

1) The Ombudsman is not meant to be on the side of the little guys. He is meant to rule fairly and independently. 

2) I am not sure that the bank could have taken the case.  The original case was Millar vs. The Ombudsman. It's a peculiar situation, but I think that only the Omubdsman could appeal it.   I have been involved with case where the lender appealed a decision by the Ombudsman, and the complainant was told by the Ombudsman that she had no role.  That the Ombudsman would deal with it.


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## Piggybank (14 Feb 2015)

I believe thay any party on notice can appeal a Judgment that impacts on it, if it believes the judgment is flawed or erroneous.


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## advice (14 Feb 2015)

Best of luck to the Millars, they may just make it over the line, due to Danske bank's description of what a variable rates was, when they entered into contract with Danske bank.


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## Knuttell (14 Feb 2015)

When will the verdict be announced?


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## PatrickJ (14 Feb 2015)

If the Millers are successful does this go for all SVR mortgage holders across the board or just Danske?


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## toby2111 (15 Feb 2015)

PatrickJ said:


> If the Millers are successful does this go for all SVR mortgage holders across the board or just Danske?


Was just about to ask the exact same question! Very interested in the outcome of this..... Is there a possibility, SVR could be slashed? Is that why banks are offering fixed rates cheaper than their SVR??


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## Piggybank (16 Feb 2015)

The answer to the question is that this legal action, if it suceeds, will only apply to Danske Bank mortgages, as it was a term in their variable rate clause which is subject to the action and not variable rate terms in mortgage contracts generally. The Appeal court can only decide on the Millars case alone, it would be up to each individual who has a svr mortgage with Danske bank to start legal proceedings if the Millars succeed in their action. However having said that, it would leave the door somewhat ajar for mortgage holders with other financial institutions to challenge their respective variable rate terms, depending on the wording in their contracts.


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## raglan (17 Feb 2015)

Hi ,

If the Millar case or other routes lead to high SVR been brought down and possibly refunded to customers of ALL banks, I have a query. We (regretfully) fixed our mortgage and lost our tracker, came out of fixed mortgage in 2009, complained to FSO and lost. I hear about a 6 year rule. Say our 6 years are up in July 09 since we came out of fixed rate, if implications of other cases like Millars bring benefits to other bank customers and we have gone beyond our 6 years, does that mean we have no hope of getting any benefit, while someone who has similar case to us but within the 6 year rule can get the benefits?
Is all hope lost after you have passed the 6 year limit is basically what I am asking?


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## Brendan Burgess (17 Feb 2015)

raglan

I think that you have raised so many hypothetical points, that there is simply no clear answer. 

1) Wait until you see if the Supreme Court upholds the High Court ruling. If they don't, all other cases fall.
2) If the Supreme Court upholds the High Court ruling, the Ombudsman must go back and hear the Millar case again, and may well rule against the Millars a second time. 

2A) If the Supreme Court upholds the High Court ruling, then some brave customer of Danske will have to take a High Court case directly, and ignore the Ombudsman. 
3) If that case wins, then some brave customer of the other banks will have to take a High Court case. 

Of course, it's also possible, but extremely unlikely, that if the Supreme Court upholds the High Court decision, the Central Bank might order all banks to review their SVRs.

But do you want the low cost option? 
Get onto your TDs and ministers and complain about your SVRs.  
 In time, that will actually bring down the rates. 

Brendan


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## kmce (17 Feb 2015)

hi Brendan
thanks a million for staying close to this - you are great
I have complained to my TD who forwarded my concerns on to Michael Noonan
got a reply last Friday  -  I have it at home and will post it complete tomorrow but the gist was he has no control over banks commercial decisions.
l am so disheartened with the whole thing
as per Charlie Weston on Sat its mortgage apartheid for those of us on SVRs
keep up  the good work
k


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## IrishHusk (17 Feb 2015)

I have today contacted my local Fine Gael TD's highlighting the issue of high SVR rates at Irish Banks. Maybe if enough of us do contact them and with an election coming soon we may get them to do something. I am unable to switch because of  negative equity so this is all I can do at the moment. Thanks to Brendan for keeping this issue highlighted


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## deltrotter (18 Feb 2015)

Well done to Brendan and all concerned on here highlighting this issue. I have found this website extremely informative. Great too to see this topic is getting more media attention.

I too am just about to contact all my local TD's and ministers to complain about the SVR.


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## BJ101 (18 Feb 2015)

Brendan Burgess said:


> Charlie Weston has a front page article in today's Indo
> 
> New hope for borrowers in variable rate nightmare
> 
> ...


 
Does anyone any insight on the KBC (prev IIB) position ?  We took out our mortgage with IIB in 2006 and were on a fixed rate until 2011, from them on at variable. Have obtained a copy of mortgage T+Cs from KBC and I can't see any definition of standard variable rate in that. I remember seeing in a previous post or article that KBC  had similiar wording to Danske i.e. variable moved in line with market conditions. The current defintion they have on their website and in any correspondence is that variable rates ''may be adjusted by the lender from time to time'' 
Thanks


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## kmce (18 Feb 2015)

hi Brendan
I wrote to Michael Noonan about  the standard variable  rates being charged by AIB/EBS .
This is the reply

" Thank you for your letter dated  December 2014 regarding AIB/EBS standard variable rates.
I must point out that I have no statutory function in relation  to banking interest rate decisions made by individual lending institutions at any particular time. 
It is a  commercial decision for each lender  to decide what interest rates  they charge customers in relation  to standard variable mortgages. Notwithstanding the fact
that  the State is a shareholder in AIB, I must ensure  that these banks  are run on a commercial cost effective and independent basis to ensure  the value of the bank
as an asset to the state.  Under the Relationship Framework which governs  the relationship  between  the Minister  and AIB I recognise  that the bank remains a separate
economic unit with independent  powers of decision.
Ultimately the pricing of financial products including standard variable mortgage interest rates, is a commercial decision  for the management team  and board of each lending
institution, having due regard to their customers and  the impact on profitability. This interest rate is determined  taking into account a  broad range of factors, including European Central Bank base rates, deposit rates, market funding costs , the competitive environment and an institution's overall funding arrangements.
The Central Bank has responsibility for the regulation  and supervision  of financial institutions in terms of consumer protection  and prudential requirements and for ensuring ongoing compliance with applicable  statutory obligations. The Central Bank has, however, no statutory role in the setting of interest rates by financial institutions.
your sincerly
Micheal Noonan 

So where do we go from here?
any advice
thanks again
k


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## Brendan Burgess (18 Feb 2015)

Well done.

Maybe write again and ask why the rates are so much higher in Ireland than in other EU countries and would he ask the Competition and Consumer Protection Council to investigate mortgage rates.

He says he can't interfere with the rates charged by the state owned banks. But that does not stop him from calling on the other banks to reduce their rates.


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## 44brendan (18 Feb 2015)

To be fair to the Minister he has no statutory function in mortgage rates, nor should he!! My own view is that it would set a dangerous precedent if politicians were to interfere in this market. I stand to be corrected, but I don't know of any country where mortgage rates are capped by statute! The Millar case is unique in that it relates to a change in interest rate on an existing contract. A Court decision is specific to the circumstances and while it will benefit those in a similar position, it will have no effect on others, whose circumstances differ.
I agree that SVR's in general give the bank total flexibility to charge what they like. However, unless/until a case is taken and succeeds in limiting the flexibility of SCR's to changes in market rates we are stuck with them.


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## deltrotter (18 Feb 2015)

I sent all my local TD's an email and also Brian Hayes MEP to thank him for his recent article. Brian replied to me and said thanks for the email and said we need to see movement from the banks.


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## Delboy (18 Feb 2015)

aidamcg said:


> I have today contacted my local Fine Gael TD's highlighting the issue of high SVR rates at Irish Banks. Maybe if enough of us do contact them and with an election coming soon we may get them to do something. I am unable to switch because of  negative equity so this is all I can do at the moment. Thanks to Brendan for keeping this issue highlighted


Well, the head of FG was saying in the Dail yesterday that the Banks are going to be hauled in because there's too much talk of repossessions of the tens of thousands of mortgages in arrears....so if you join the dots, you'll see 1 of the main reasons why SVR's are so high!

And yes, we do need to see movement from the Banks. They can start with the mortgages 4+ years in arrears and work there way back to those gone 6 months over!


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## PatrickJ (18 Feb 2015)

With regard to the Minister's response to poster KMC.  The Ministers answers with due respect to his statutory duties smacks of no regulation.  The Central Bank controls the Banks, the Minister controls the Central Bank unless we are facing into another P. Neary scenario where eyes were off the ball and Aherne voodoo economics were all the rage.

Regulatory control is essential I would have though post the Celtic Tiger and the broader scope of economics would normally address its market i.e. in this case the drowning mortgage holder.  Business is not a one way street for the banks, the Irish public have bailed them out.  Now its time for equalized levels or their will be no sustainable market for home ownership into the future.

The other very interesting observation is that in no way should home ownership be the subject of mortgage profiteering by the lenders but that's another story.

Do we want a society were the banks aided by the Minister actually financially rape the citizens or do we want a society constructed whereby the financial institutions serve the community for society's overall benefit?

Where have all the University Professors gone that were evident in the crash who might contribute to a reconstruction of society based on a more balanced outcome for all?


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## gahfan (18 Feb 2015)

Hi All, am new to this thread, am paying SVR of 5.8% with P Tsb so it would be great if something came of this, scandalous the way people are being screwed with such high interest rates you would wonder what will the SVR be if the ECB starts to go up if it's 5.8% when the ECB I/r is so low.


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## SallyM (19 Feb 2015)

I have just e-mailed all my local TD's, Shane Ross, Michael Noonan, Micheal Martin & Gerry Adams!


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## gahfan (3 Mar 2015)

Hi All, does anybody have any update on this please?


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## SallyM (4 Mar 2015)

I e-mailed a load of people about the high SVR for existing customers 2 weeks ago.  To date I have received three responses from TD’s (including a phone call that day from one TD)!

Brian Hayes MEP was excellent at feedback and seems to be doing real work in trying to get this highlighted. I really feel the more people that lobby their local politicians the better. 

With the Bank of Irelands’ recent announcement of profits, surely their argument that the exorbitant Standard Variable Rates are required in order to subsidise their losses does not stand anymore?


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## shweeney (5 Mar 2015)

gahfan said:


> Hi All, am new to this thread, am paying SVR of 5.8% with P Tsb so it would be great if something came of this, scandalous the way people are being screwed with such high interest rates you would wonder what will the SVR be if the ECB starts to go up if it's 5.8% when the ECB I/r is so low.



PTSB offered to take on my BOI mortgage at a variable rate of 3.7% - are they really charging you 5.8%?  Do you have the option to move - BOI, KBC and AIB are all touting for switcher business, the first 2 will pay some/all of your legal fees.


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## sarahsliver (7 Mar 2015)

Is there no protection for svr mortgage customers, I've checked my contract/loan offer and they can change the rate to whatever they please is that not a heavily weighted contract on the side of the bank. If they have an obligation for fairness to their customers?  Would it be worth going to the ombudsman. When we got our mortgage the broker said that the rate would be within reason but what's within  reason? I know realize I my 23 year old self should have asked more questions but we were in such a panic to buy before we were priced out of the market ahh hindsight is a great thing.


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## advice (11 Mar 2015)

If the Millars action fails in the Appeals Court ( hopefully not ), surely the Millars will appeal the decision to the European Court of Justice. The term at the centre of the Millar's appeal is Danske Bank's variable rate mortgage clause in the loan agreement, which states; that variable rates may vary at any time  " in response to market conditions " . This clause adds a " qualifying factor " for Danske Bank to increase or decrease interest rates, which the Millars contend the bank are in breach of. If the Appeals Court decides against the Millars and the case is taken to Europe, the Millars will probably win on this point alone but also on the point that they would never have signed a Loan agreement with Danske Bank that contained an unqualified variable rate mortgage clause, which would allow the Bank to vary their mortgage rate at any time, in response to the Bank's own specialist factors to which the Millars are not privy to and which they have to accept as de facto. This would be classed as an unfair term under European Directive 93/13/EEC and would not be binding on the Millars.


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## gahfan (16 Apr 2015)

Hi, just wondering if anybody heard any update on this?


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## Ashb (19 Apr 2015)

Havn't seen any update on this. 

We wrote to Danske last month with the same mortgage query on the 'market conditions' clause as the Millars. Danske replied that they they were satisfied they were fully compliant with this clause in our mortgage agreement, as the loan is not a tracker and rate adjustments are not linked to the movement of the ECB rate. We are looking at writing to FSOB next, although guess they will just await the outcome of the Millar's case like the rest of us.


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## reddanmm (20 Apr 2015)

I am just listening to Karl Deeter about the SVR why is he so pro banks .


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## demoivre (20 Apr 2015)

reddanmm said:


> I am just listening to Karl Deeter about the SVR why is he so pro banks .



They pay his wages.


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## Delboy (20 Apr 2015)

reddanmm said:


> I am just listening to Karl Deeter about the SVR why is he so pro banks .


He's pointing out a simple fact...if the Banks get hit with a new levy, they'll just pass it on via charges. A new indirect tax so to speak.
His point seems to be that lower rates are coming very soon due to market conditions and there's no need for Politicians to interfere with the banks, not that they really have the power to do so in any case


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## advice (5 May 2015)

I think the lowering of interest rates is coming very soon as Delboy, the pro banker points out. This is not due to market forces as alluded to, but because some Joe Soap has sent a letter of complaint to the European Commission competitions and anti trust unit about the Irish State monopolisation of the market ( The State currently own 62% of the banking market ) so they can be considered market dominant.The State has used its dominant position to stagnate competition (ie  Central Bank of Ireland sending erroneous data to ECB about variable rates charged by banks in this Country etc so that competition will not arrive ) so that it can quickly rebuild the balance sheets of the broken banks it was forced to acquire. This however was on the backs of the unfortunate variable rate customers who were hung out to dry by the State. This action (or inaction) by the State will probably receive sanctions by the Commisssion. I can see the State having to defend a lot a lawsuits down the High Court, but I will not bother the readers with any more detail.


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## Gerry Canning (5 May 2015)

Delboy said:


> Well, the head of FG was saying in the Dail yesterday that the Banks are going to be hauled in because there's too much talk of repossessions of the tens of thousands of mortgages in arrears....so if you join the dots, you'll see 1 of the main reasons why SVR's are so high!
> 
> And yes, we do need to see movement from the Banks. They can start with the mortgages 4+ years in arrears and work there way back to those gone 6 months over!


Delboy ,

The reason SVR rates are way out of fairness to customers , is solely because thus far, Banks feel they legally scrap home in so doing.
It may well be that because Repos are so difficult the Banks use SVRs to compensate.
There is a glaring inequity here.

ADVICE.
You mention (competition) or lack thereof.
Was it not much too much competition that got us into the mess of Bankers , chasing volume rather than profit margin in the fluffy times?


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## Piggybank (12 May 2015)

Gerry,

yes, too much chasing of market share by the banks coupled with no bank regulation got us into the mess we are in, however i believe the central bank is starting to do what it is supposed to do.


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## Bronte (14 May 2015)

Irish Times says the high variable is because banks are making hardly any money on trackers

http://www.irishtimes.com/news/irel...ers-for-variable-mortgage-rate-cuts-1.2211566

They are getting this from a report from the central bank


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