AIB AIB has accepted the Ombudsman's decision and will be rolling it out to 5,900 impacted customers

Brickep said:

Great result And thank you Brendan for never giving up. I have a question we are one of the 6000. Since we have finished our mortgage and won’t be able to receive a write off. Would we still get a payment.

thanks

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When did you take out your mortgage? Was it around the 2008 mark like the rest of us? If so then fair play for paying it off in the mean time! Did you you come off a fixed rate at some stage since 2008?

zxcvbnm said:

You are able to take what is initially offered and then appeal further without any risk of initial offer being withdrawn (if that’s what your question is?). It even says so on AIBs website in the FAQ where they announced this decision. (But this is well known fir those involved in the previous rounds)

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Thank you. That's exactly the question !

Very disappointed. AIB have gotten off lightly. We are still overpaying on mortgage whereby the prevailing tracker rate denied to us should have been reinstated. The prevailing tracker rate is the last published rate prior to their withdrawal.

Well done Brendan for all of your considerable efforts. It is a damning indictment of how the Bank has behaved that it took a Complaint from a customer that was essentially drafted by you using all of your knowledge to even to get us to this point. I am sure people will want to see what their letter offers them before making any decisions but my gratitude to you for getting us this far.

I'll try and work out what the difference between a 1.5% tracker and this result.

I would suspect that the difference is not huge as aib did not gouge variable rate holders as much as others.

Remember also that many people will have received a higher trs payment too.

There will be a difference, but I suspect not as substantial as many will think.


Remember also that if this went to a court hearing, the case could have been lost, or the tracker set at 3% which would negate any benefit

Peemac thank you that would be good to know.

peemac said:

I'll try and work out what the difference between a 1.5% tracker and this result.

I would suspect that the difference is not huge as aib did not gouge variable rate holders as much as others.

Remember also that many people will have received a higher trs payment too.

There will be a difference, but I suspect not as substantial as many will think.


Remember also that if this went to a court hearing, the case could have been lost, or the tracker set at 3% which would negate any benefit

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Thank you Peemac. That would be useful to know. I cannot understand why the FPSO didn’t rule on the prevailing rate issue. Given the breach of contract, the impacted group should be put back to a position where the can choose fixed, variable or prevailing tracker rate.

I wonder if the principal reduction and cash payment amounts were flipped, would that have made some feel better about the process and results?

I don't see how the Ombudsman could have gone too much further so as to avoid AIB taking this court and to ensure Karen in this case got recompense.

We have a long time left on our mortgage and it was a high value in 2010 so we are looking at really decent numbers that will make a big difference over the remainder of the mortgage per month, not to mention a nice cash injection in a difficult time (my wife and I had significant pay cuts the last few days) so that can only be good. You could look at the awards as net numbers if you wanted, that is you would have to earn double yourself to be able pay down principal or have extra cash.

We shouldn't rule out the CBI having a comment on the final structure of the award either because there are some grey areas in the judgement. It might have taken a long time for AIB to get there but they have lost a lot of ground. The impact of the mortgage write down isn't just in the 2019 balance sheet, it impacts their interest revenue for the next 15/20 years so AIB losses aren't capped @ 300mn.

Plus this judgement has mobilised people. Advocates like Brendan, journalists like Charlie, politicians like Michael and Pierce and those who took complaints to Ombudsman like Karen have done the heavy lifting to get us to where we are. Most of the rest of us were either minor players, like appealing to the tracker panel, passive or unaware. So long as there is the opportunity to accept the award and raise further queries with Ombudsman, absolutely everyone who wanted to could make a complaint with valid questions in the knowledge that AIB have lost ground and grudgingly taken a step backwards (if that separation didn't exist, a lot of people couldn't take it forward).

I think that is why the CBI might add something to the mix, so as to avoid death by 1000 cuts on the process. Plus as a few people have commented, we haven't seen fully what AIBs final redress approach will be to cover the variables.

Basically though what has happened the last few days is monumental I think anyway.

Megafan

That is a really great summary of where we are, what we have achieved and what people who think that they should get more can do.

Brendan

Yes. V good post megafan. As you say, it does indeed make it far easier for people to pursue additional scenarios with the ombudsman given this ruling.

It also makes sense as you say that the CB may add something to the mix to avoid death by 1000 cuts. As presumably, a large point of this exercise is to draw a line under this for as many as possible given the whole thing has rattled on for 10 years already.

I guess we just have to wait and see the detail of the ombudsman’s report and then see what package AIB come up with.

peemac said:

I'll try and work out what the difference between a 1.5% tracker and this result.

I would suspect that the difference is not huge as aib did not gouge variable rate holders as much as others.

Remember also that many people will have received a higher trs payment too.

There will be a difference, but I suspect not as substantial as many will think.


Remember also that if this went to a court hearing, the case could have been lost, or the tracker set at 3% which would negate any benefit

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If we take an example of someone who took out a 30 year mortgage in 2008 with a balance of 330k in 2010 and who now owes 260k:

Under the ombudsman ruling their capital is reduced to 220k and they pay 54k in interest over the next 18 years (using AIBs lowest available rate of 2.55%). They would also get a cash payment of 10k.

If the ombudsman had reinstated the prevailing rate and we adhere to the to the idea of 3/4 of the redress being taken off the capital rather than a cash payment we get 220k at 1.5% over 18 years with interest payments falling to 31k and a cash payment of 10k.

The difference over the remaining term of the loan is 23k.

I agree that the difference isn't huge over the 18 years considering they have overpaid by 50k in the first 12 years.

However not being put back on the tracker does still leave customers at the mercy of the bank in terms of unilaterally increasing rates.

Obviously rates can rise over the 18 years but trying to keep it straightforward.

peemac said:

I'll try and work out what the difference between a 1.5% tracker and this result.

I would suspect that the difference is not huge as aib did not gouge variable rate holders as much as others.

Remember also that many people will have received a higher trs payment too.

There will be a difference, but I suspect not as substantial as many will think.


Remember also that if this went to a court hearing, the case could have been lost, or the tracker set at 3% which would negate any benefit

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From my calculations to be treated with a lot of caution as they were made by someone who has never done this before!!!

Came off fixed in late 2009 33 years left with 340k on the mortgage.

Currently have in the region of €275k(Variable at 2.95%) remaining and a monthly of €1330. With 12% written off will have €233k remaining and a monthly of about €1130 plus interest repayment of about €13k which will clear outstanding loans!

Had I been on a tracker margin of 1.5% starting with €340k in 2010 I would have about €254k left now. Am trying to figure out the implications into the future now but this is a huge result for myself and family!

Can someone with a bit more knowledge review my figures please!

I wanted to check as I am confused as to whether our situation fits into the above criteria, we took our mortgage out with AIB in 2008 with a fixed rate of 5.15, we went into negotiation with the bank in 2009 and reduced to interest only re-payments for 12 months. In march 2010 we went back to the bank to negotiate how to progress and the only agreement we could reach was for us to pay ourselves out of our fixed rate mortgage (summer 2010) and sign up to the cheaper again fixed rate which was available to us at the time of 3.19. The bank were unable to offer a tracker to us which some of my siblings were on at the time. We received a cheque in 2018 for the 1615 but didn't take a case at the time. It sounds like we fall into the category however am not sure, as we paid our way out of one fixed rate early, and went straight into another fixed rate. However all negotiation were made in an effort to allow us to manage our remortgage re-payments.
Thanks for your time
Thanks to Brendan and Karen for all you have achieved, it is incredible.

MCJBRibbon said:

I wanted to check as I am confused as to whether our situation fits into the above criteria, we took our mortgage out with AIB in 2008 with a fixed rate of 5.15, we went into negotiation with the bank in 2009 and reduced to interest only re-payments for 12 months. In march 2010 we went back to the bank to negotiate how to progress and the only agreement we could reach was for us to pay ourselves out of our fixed rate mortgage (summer 2010) and sign up to the cheaper again fixed rate which was available to us at the time of 3.19. The bank were unable to offer a tracker to us which some of my siblings were on at the time. We received a cheque in 2018 for the 1615 but didn't take a case at the time. It sounds like we fall into the category however am not sure, as we paid our way out of one fixed rate early, and went straight into another fixed rate. However all negotiation were made in an effort to allow us to manage our remortgage re-payments.
Thanks for your time
Thanks to Brendan and Karen for all you have achieved, it is incredible.

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You are covered by this and have a case very similar to ours. We did the same in 2009 and bought out of the expensive fixed rate by topping up our mortgage with the breakage fee to move to the cheaper variable rate , all of this under the banks guidance. The fact you went into another fixed term is irrelevant as the issue is that you should of been offered a tracker rate when making that move.

I would like to thank Brendan for his help and support throughout this process. He has helped so many people and I am extremely grateful to him. Sorry but I am still confused. Why did they give 12% write-down and 4% of the capital balance figure but not give Karen (us) back our tracker rate?? They are compensating us for not giving us the tracker rate since we rolled off our fixed rate contract in 2012 but for the rest of the mortgage term (which is 16 years in my case) we are still going to be paying a higher rate of interest??? Our rate is 3.14% and the lowest rate with AIB is 2.45% which is a Green 5 year fixed rate. These rates are still considerably higher than the tracker rate of 1.5%. Are we not entitled to a tracker? Why make a decision to compensate us but then punish us for the reminder of the mortgage. In a time where a lot of people have lost jobs and are requesting breaks from our mortgage (which the banks are still profiting) I cannot understand why we are still fighting for what we are entitled too.

Ginger2 said:

I would like to thank Brendan for his help and support throughout this process. He has helped so many people and I am extremely grateful to him. Sorry but I am still confused. Why did they give 12% write-down and 4% of the capital balance figure but not give Karen (us) back our tracker rate?? They are compensating us for not giving us the tracker rate since we rolled off our fixed rate contract in 2012 but for the rest of the mortgage term (which is 16 years in my case) we are still going to be paying a higher rate of interest??? Our rate is 3.14% and the lowest rate with AIB is 2.45% which is a Green 5 year fixed rate. These rates are still considerably higher than the tracker rate of 1.5%. Are we not entitled to a tracker? Why make a decision to compensate us but then punish us for the reminder of the mortgage. In a time where a lot of people have lost jobs and are requesting breaks from our mortgage (which the banks are still profiting) I cannot understand why we are still fighting for what we are entitled too.

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This is my interpretation of why its not perfect but until the decision is published its anyone's guess.

tnegun said:

From what Brendan said "As a fair balance, he ordered AIB to write down the balance of Karen's mortgage by 12% of the balance on the day she rolled off the fixed rate and should have been offered a tracker in 2010." I'm reading this to mean that on the issue of Prevailing Rate the FSPO supported both arguments equally and split the finding 50/50 so half the term at the equivalent of a tracker at 1.5% the remainder at variable or whatever you choose to do with it.

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tnegun said:

You are covered by this and have a case very similar to ours. We did the same in 2009 and bought out of the expensive fixed rate by topping up our mortgage with the breakage fee to move to the cheaper variable rate , all of this under the banks guidance. The fact you went into another fixed term is irrelevant as the issue is that you should of been offered a tracker rate when making that move.

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MY case very similar, paid to break out in jan 2009, after fixing in 2008. Never offered tracker here, so at the risk of sounding petty, I'd at least like the breakage refunded, if we are still not going to get tracker. So many variables in everyones cases, but a lot of similar foundations to the arguements...
Great support here from everyone. Keep up the energy on this everyone, 10 + years on !!

OK, I've done some basic figures - comes with a health warning, but it is in the ballpark. (I had 95% accuracy on KBC figures )

Based on each 100k, taking average 27 years left on a mortgage at July 1st 2010.

Using an average charged rate of 3.5% for the period from July 1st to April 2020

Assuming a rate of 2.95% is charged for the remainder of the loan from April 2020 (this will change, but tracker rates will probably change at similar rates, so comparison should be valid)

The result is that the deal is the equivalent to a tracker rate of about 1.8%. If you had been getting the higher TRS relief, then its about 1.65%.

Average interest refund due on the 12% reduction is close to €4,000 per €100,000

Average reduction in Mortgage payments going forward based on current 2.95% rate is €50/100k/month.


An easy comparison is taking the total paid on a per 100k balance in 2010 @27yrs remaining @ av tracker of 1.9% (remember rates were not always 0%) is 128k

Total paid on 88k balance from 2010 @ 27 year remaining @ average rate of 3.1% for the full 27 years is €130k.

If you can switch to a 2.5% rate and can keep at circa 2.5% for next 17 years (a strong possibility), your total per 100k repayment will be 127k, and a circa 1.65% tracker.

And on top of this, you are free to switch without giving up any of the benefits of this deal



Considering many had given up on this, I think its an exceptional outcome.

A simple way we are looking at the 12% is its current time value. The principal @ 2010 is the base mortgage value. In 2020 that 12% equals circa 15% of the remaining principal of our mortgage so when finalised, the next interest calc will be based on 15% less principal, not to mention we will be comfortably in the range for LTV deductions plus reduced principal payments. All of this makes material differences monthly for the remainder of the mortgage.

The above is not a tracker but the savings are certainly proxy for a tracker and a huge benefit long term, not focussing specifically on 12%/4%. The more I think about, in the absence of specific details, the more interesting the way the judgement was arrived at.

Thanks for the reply. But why if we are entitled to tracker rate why would the remainder be at variable or whatever you choose to do with it. Sorry I am still confused. If we are entitled to a tracker why are they denying it to us?