# Deliberately Wrongly categorised as a Buy to Let by Ulster Bank result in massive over charging



## Midfield (21 Jul 2020)

We have recently discovered that we were categorised as a Buy to Let Customer since taking out our mortgage in 2008 with Ulster Bank/First Active. 

They took the Tracker away from us at the 11th hour and forced us into a 5 year fixed. They had given us a tracker on our initial borrowing to buy the house and when we had planning to do an extension and only ever talked about a tracker with the broker they removed the tracker offer and offered us a take it or leave it 5 year fixed. They did this in a loophole to avoid the 2% stress testing rules under the consumer protection code 2012. I feel they deliberately categorised us as BTL to allow them override internal controls and charge an exorbitant level of margin to further benefit from our vulnerability. No other product or term was shown, of all things we did not want to fix, rates were coming lower and were going to be low for a long time.

It was only when I had given up the ghost of getting the tracker for our sub account 2 (the extension) and asked a pal who's a bank manager there to put me on the most competitive rate that we discovered we were on the buy to let categorisation and that we could only move to other buy to let rates. The buy to let rates available to us were 4.95% and 5.1%. 

We are presently on 4.3% standard variable. The best available PDH Private Dwelling Home was 2.3% fixed for 2 years. There is a 2-3% difference between PDH and BTL rates with Ulster. Never before had they disclosed our categorisation.

I requested BTL and PDH rate sheets for Fixed, Variable and Tracker products from 2008 to the present day. Ulster bank in their final response letter have said that they are not willing to provide this information to me. They would only share the rates I was on during my mortgage. I was never sent PDH available rates. The only rates I could access were BTL rates and I can still only see BTL rates through their Manage My Mortgage web page login.

We feel very aggrieved we have been under huge financial and emotional strain because of this. Not only were we denied the Tracker on our extension and forced onto a ultra high 5 year fixed we were also catgorised wrong resulting in huge over payment. They also are doing everything in their power to frustrate and deny us our rights. In my opinion they are criminal, fraudulent and have cost us tens of thousands.

I think this could be as big or bigger than the tracker scandal. I would imagine that there are thousands of Ulster bank Mortgage customers who have been forced onto 5 year fixed to avoid the 2% stress testing and categorised as BTL deliberately to take more margin.


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## RedOnion (21 Jul 2020)

So, just to be clear, in 2008 they foresaw a stress test in 2012?...


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## Monbretia (21 Jul 2020)

I think that stress test comment refers to the fact that if a 5 yr fixed was chosen in 2008 and around that time in general the customer could  borrow more than on any other rate as they did not have to apply the stress tested repayment capacity to the 5 yr fixed.  Not sure forced to take it is the right term, a lot of people wanted to borrow the extra the 5yr rate would give, they had the choice of taking a lower amount of loan on one of the other rates.


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## RedOnion (21 Jul 2020)

@Monbretia 
That makes more sense than:


Midfield said:


> They did this in a loophole to avoid the 2% stress testing rules under the consumer protection code 2012



I read the case as being First Active? In early 2008 they offered the same interest rates for PDH and BTL loans.

The difference was that BTL was interest only for up to 5 years. So, one could choose a BTL rate and pay interest only.

Since the rate was the same, it'd be difficult to show the bank did it to charge exorbitant rates.

But to only realise recently that you're paying recently?

It's an interesting case, but the facts need to be laid out clearly.


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## Monbretia (21 Jul 2020)

FA/UB all the same thing at that stage from an underwriting point of view anyway!   I agree that PDH & BTL rates were the same back then so unless in the more recent past they have made a bigger differential in the rates and moved OP to those?

Also that exemption from stress testing on 5 yr rate applied to PDH so not sure why they would put someone on a BTL to avail of it.

Interestingly in FA anyway BTL was 5 yrs interest only but you could actually do 10 yrs interest only on a PDH, think that was only for a brief while though, never made sense!


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## Midfield (21 Jul 2020)

They placed us on 5 year fixed rate of 5.75%. we have no choice but to take it. we could only see BTL rates. I dont know what the interest rate differential was betweek BTL and PDH as rhey wont ahow us historical rates.​


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## RedOnion (21 Jul 2020)

When exactly was this? 
Up to July 2008 the same rates were available for BTL and PDH mortgages. That's if it was with First Active.

If you confirm whether it was FA or UB, and the month I'll see if I can find the rate history for you.


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## moneymakeover (21 Jul 2020)

The original loan continued as tracker?
Only the additional loan to build extension was at the high rate?
What is the breakdown in size between the tracker loan vs the top up?


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## Midfield (21 Jul 2020)

RedOnion said:


> So, just to be clear, in 2008 they foresaw a stress test in 2012?...


No the consumer protection code was in place in 2008. I think the first issuance of the consumer code was in 2006. its has been updated and the latest version of the central bank code is 2012. The 2% stress testing requirement was there in 2008.


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## Midfield (21 Jul 2020)

RedOnion said:


> When exactly was this?
> Up to July 2008 the same rates were available for BTL and PDH mortgages. That's if it was with First Active.
> 
> If you confirm whether it was FA or UB, and the month I'll see if I can find the rate history for you.


It was in November 2008 at drawdown for the extension. I think in November it had moved from FA into UB. We got the tracker in April 2008. They had stalled between August to November and requested the same information over and over again. Asking for documents such as bank statements, ID, Address verification, Payslips on multiple occasions. My wife and i were in permanent employment.


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## RedOnion (21 Jul 2020)

1. Do you have 2 sub-accounts in your mortgage?
2. Are they both classified as BTL?
3. Is the main account a tracker?
4. Did you already own another home when you purchased this, or were you moving in immediately?


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## Midfield (21 Jul 2020)

moneymakeover said:


> The original loan continued as tracker?
> Only the additional loan to build extension was at the high rate?
> What is the breakdown in size between the tracker loan vs the top up?


Initially the tracker was 417k and the extension was 161k. The tracker was 1.15% over Euribor. yes the original loan continued as tracker. its the same mortgage number and sub account 2 for the now variable top up


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## Midfield (21 Jul 2020)

RedOnion said:


> 1. Do you have 2 sub-accounts in your mortgage?
> 2. Are they both classified as BTL?
> 3. Is the main account a tracker?
> 4. Did you already own another home when you purchased this, or were you moving in immediately?


Hi. Thanks for your help on this.
1. No i have the same account number the main trackers ac 1 and the variable top up for the extension ac 2
2. Yes they are and have always both been classified as BTL. UB have said that this was an error that they made and apologised for doing so but said that the rate was always a PDH rate but I dont believe them and they wont share rate sheets and i havent been shared with PDH rates and all I can view is BTL rates and my pal whos a bk manager there said he couldnt do anything for me until they investigate and amend the classification. That they would definitely have to offer compensation but to be ready for the long haul as they will offer peanuts and then only when threatened offer a little more. they seem to be completed unconcerned with legal challenge or ombudsman
3. yes main ac is a tracker. They intiially made me fix in year one at 4.75% then it went to a 1.15% over euribor tracker. By requesting the rates sheet i was trying to see if we were put on a 1 year fixed BTL rate followed by a BTL tracker margin. and the same for the top up 5 year fixed and subsequent variable was that all BTL pricing
4. No we were first time buyers. we did not move in straight away and lived with parents initially whilst work was happening to refurbish. We moved in after a month. All correspondence have always gone to our PDH address of our property


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## RedOnion (21 Jul 2020)

Midfield said:


> went to a 1.15% over euribor tracker


Can you clarify. Tracker over EURIBOR or over ECB?


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## moneymakeover (21 Jul 2020)

Is the extension still on expensive BTL rate?


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## Midfield (21 Jul 2020)

Sorry yes not Euribor - 1.15% over ECB


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## moneymakeover (21 Jul 2020)

Midfield said:


> Sorry yes not Euribor - 1.15% over ECB


Is it like 4.5% ?

And can you reduce it by fixing?


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## RedOnion (21 Jul 2020)

That makes sense. There were some EURIBOR ones which would be a different conversation.

So, to summarise:
April 2008. Drew down main mortgage. 1 year fixed, reverting to ECB + 1.15% tracker. Due to potentially a clerical error, this was set up as a BTL. No real impact, because at that time the BTL and PDH rates were the same.
Roll forward to November 2008, when a top-up was drawn down. Trackers had been withdrawn, but bank offered 5 year fixed rate. However, as main mortgage was BTL, the top-up was also a BTL.
(I'm thinking that it made sense at the time to take the fixed rate, as their fixed rates were lower than the variable rates?)

So you've a 161k original mortgage account that has been on the BTL variable rather than SVR since the end of fixed rate in 2013.
The main tracker part is ok?

Is that correct?

That's a bit different the the 'deliberate', 'fraudulent', 'criminal' actions in your opening post?

I'm genuinely trying to help you, but I'd suggest keep it to facts if you want factual answers.


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## Midfield (21 Jul 2020)

moneymakeover said:


> Is the extension still on expensive BTL rate?


Yes at present but i have tried to move it onto the best available PDH rate today and written a letter to them requesting they move us to the 2.3% 2 year fixed rate. which i am informed they will wonce they get our signed instruction. I had been wary of making a change in case it was consider to be acceptingnof their dreadful treatment of us and not giving us the tracker in the first place. but decided after finding out about our wrong classification to put a line in the sand of terrible rates and get onto the lowest PDH rate. The manage my mortgage online  still has only got BTL rate options. they say that its an IT issues that cant be changed after being set up incorrectly as a BTL customer and that they have corrected their categorisation mistake on our mortgage allowing us to move to PDH rate following writing to them. Its 12 years of this overcharging and no more future over charging that i need to address


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## Midfield (21 Jul 2020)

moneymakeover said:


> Is it like 4.5% ?
> 
> And can you reduce it by fixing?


The 5 year fixet was at a rate of 5.75%. It then moved to a variable of 5.1%, then down to 4.7% and then 4.3% a couple of years ago. all along we coukd only see BTL higher rates so we thought there was nothing we could do. The rate im on at present is 4.30% and ive written to them after they examined my mortgage and agreed we were categorised incorrectly and we will be moving to a rate of 2.3% for 2 years fixed. i need to find out the historical rates to prove our case and calculate the compensation we deserve. not to mention the forced 5 year fixing to avoid the 2% stress testing tolerance


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## Midfield (22 Jul 2020)

RedOnion said:


> 1. Do you have 2 sub-accounts in your mortgage?
> 2. Are they both classified as BTL?
> 3. Is the main account a tracker?
> 4. Did you already own another home when you purchased this, or were you moving in immediately?


Do you have access to UB historical mortgage rates?


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## RedOnion (22 Jul 2020)

I don't have a list of all the rates to hand, but it's possible to find them when putting together a specific case.

It's tedious but you can use the website here to see historical snapshots of a website: archive.org/web/

Alternatively, going back through copies of the newspapers for the dates your rate changed. You can access these via your library. 

Maybe someone here already has them from a tracker redress case.

Unfortunately UB archive their press releases, so they're not all available online as with some banks.


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## Midfield (26 Jul 2020)

Thank you for your help on this i will check the archive and papers


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## Midfield (26 Jul 2020)

RedOnion said:


> @Monbretia
> That makes more sense than:
> 
> 
> ...


there were certainly much better rates available when they forced us into a 5 year fixed. they also claim we were offered other products but that was nevr the case. the broker said its this 5 year fixed rate or nothing. The only reason in my eyes that they placed us in a 5 year fixed was to avoid the stress testing.
We brought them to the ombudsman regarding not giving us the tracker. we were before the avalanche of tracker scandal claims/complaints and the ombudsman i think was not aware of the horrific behaviour of retail lenders at that atage. We lost but were given some compensation because of their stalling tactics etc. I had bèen hesitant to switch or change or pay down more of the mortgage because i felt it was conceeding or condoning their treatment of us. The only rates i was quoted were extremely high so it didnt make sense to move to a different fixing or variable product. Only when i got to speak to a friend who works there did they realise that the lower pdh rates were not available to us and an investigation took place to resolve it. Therefore were have been artificially held on higher pdh rates for years and deserve to be compensated for this. all the applications and documents stste pdh but the mortgage was always btl.


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## Midfield (26 Jul 2020)

RedOnion said:


> I don't have a list of all the rates to hand, but it's possible to find them when putting together a specific case.
> 
> It's tedious but you can use the website here to see historical snapshots of a website: archive.org/web/
> 
> ...



#23
Thank you for your help on this i will check the archive and papers


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## RedOnion (26 Jul 2020)

Midfield said:


> all the applications and documents stste pdh but the mortgage was always btl.


Based on what you've said, yes I agree fully that you should have been on a Pdh rate, and you deserve compensation for the difference.
However, you need to move away from the narrative that they did it intentionally, because it doesn't make any sense. You were already in a BTL tracker rate for the original purchase long before you got the top-up on the 5 year fixed rate. At the time you got the initial mortgage, the same tracker rate was available for BTL and PDH purposes. Move away from the narrative about fraudulent, criminal behaviour, and stuck to the facts. You'll get further.


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## Monbretia (26 Jul 2020)

Agree with above and also the 'forcing' you onto the 5 yr fixed so that they wouldn't have to do a stress test is a bit of a red herring.  The benefit of no stress testing on a mortgage application was to allow the borrower borrow more than they could on any other rate as every other shorter fixed term or variable rate had to be stress tested.   If you qualified for the amount you wanted on the other rates then why would they care if you went for them rather than the 5yr fixed, the 5yr was popular with borrowers as it allowed a higher loan than they could get on any other rate.


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