# Ombudsman : "[ptsb] has discretion to set then current margin  at 2.35%"



## Brendan Burgess (7 Aug 2020)

Decision 2020 -0077

Note: The Ombudsman does not name the lender as ptsb, but it's clear from the wording and the rate. 

In 2007 Mairéad had a joint mortgage with a partner at a tracker rate of ECB +1.1% 

In 2008, she redeemed that mortgage and took out a new mortgage in her sole name. 

It was fixed for one year and at the end of the year, the "then current tracker margin" would apply.  The loan offer made no mention of a rate of 1.1%.

_The Ombudsman accepted that Mairéad was offered the option of ‘the then current [bank] tracker mortgage appropriate
to the loan’ on the expiry of the fixed interest rate period and in accordance with the terms and conditions of the loan offer. This rate was applied in the absence of an alternative rate option being chosen by her. He also accepted that it was within the bank’s commercial discretion to set an interest rate of ECB + 2.35% in January 2009.


The Ombudsman also found that there was no entitlement on the expiry of the fixed interest rate period in 2009 to the tracker interest rate of ECB + 1.10% that had applied to the joint mortgage loan that was redeemed by Mairéad in February 2008. Each mortgage loan is governed by the terms and conditions applicable to that particular mortgage loan. The fact that both
mortgage loans were secured on the same  property did not entitle Mairéad to the same  interest rates on both accounts. For these
reasons the Ombudsman did not uphold the complaint._

*Side issue*

_Mairéad outlined that in 2008 she redeemed the joint mortgage and took out a new mortgage with the bank in her sole name secured on the same property, ‘with the understanding’ that  she would have ‘the same’ tracker rate of ECB  + 1.10% on the new mortgage account. 

The Ombudsman noted that Mairéad had not provided any evidence or offered any reason as to why she was of the ‘understanding’ that a tracker interest rate of ECB + 1.10% had been agreed at the time she applied for the mortgage loan in 2008. The evidence showed that the bank and Mairéad did not have any direct communication at the time as Mairéad had engaged the services of a broker. _


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## core123 (7 Aug 2020)

I'm wondering if this a little different to the ptsb discounted tracker rate? Although I fear its not. In my case I got a tracker in 2007 which at the time would have been ecb+1.10 but was given a 2 year discount which amounted to ecb+. 99%. On expiry of the discount instead of going back to the original rate 1.10% I was offered ecb+2.25%.


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## Stitcher (7 Aug 2020)

A bit different hopefully.  Were there any actual  'discounted tracker' cases among the decisions? Most seem to relate to coming off fixed rates but have not gone through them all. Disappointing that ombudsman accepted the rate of ecb+2.25, which was v high and not competitive ( tho I wouldn't mind that now !).   My issue is that they never highlighted the fact  that in reality it wasnt a discount at all. It was a one or two year tracker. It will be good to hear about an actual discounted tracker case.


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## Brendan Burgess (7 Aug 2020)

It's very different. 

ptsb always had the commercial discretion to set the rate.  I am amazed that anyone challenged it. 

Brendan


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## core123 (7 Aug 2020)

Brendan, so you think there is still a bit of hope for the ptsb tracker cohort? This case doesn't change anything?


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## Brendan Burgess (7 Aug 2020)

You asked initially about the discounted tracker cohort. I think that they have a strong case.

I have not seen the case for the others. If their case was "the rate was too high" , then this decision by the Ombudsman kills that argument off.

Brendan


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