FAQ AIB Prevailing Rate tracker redress Frequently Asked Questions

Brendan Burgess

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AIB quietly edited their website last Friday to say the following "While this case involved a number of complex issues the Bank has decided to accept the finding in full, and to apply the finding to other customers within the same cohort."

They have not issued any further information. It is not known if they are going to apply the finding exactly as it was issued, or whether they will try to get away with less. They might even go beyond the Ombudsman's finding to minimise the number of further complaints to the Ombudsman and the High Court.

So this FAQ carries a big caveat - this is what I expect to happen. But it might be different.

How do I know if I am included in the Prevailing Rate cohort?



If you got a letter from AIB in early 2018 with a cheque for €1,615, then you are included in this cohort and will get redress.

It does not matter if you appealed it or did not appeal it. It does not matter if you have since sold your house or switched lender. It does not matter that you are or that you have been in arrears.

If you got a cheque for €1,615, you are one of the lucky 5,907 impacted customers.




I still don't believe that I am included. How can I check?

If customers have any queries, they can call our dedicated Helpline on 1800 235 460 (or +353 1 7715888) between 8am and 7pm, Monday to Friday.

The Helpline will confirm that you are included but they will not be able to tell you how much you will get.

I have been told that as I drew down my mortgage after October 2008, I am not included in this group?

If you got a cheque for €1,615, you are in the group.

The October 2008 date has no relevance.

How much will I get?

Assuming that AIB follows the Ombudsman's decision.

There are two parts to the Ombudsman's decision:

1) Reduction on your mortgage balance
Your mortgage balance today will be reduced by 12% of the balance owing when your first fixed rate ended.

If your mortgage was €100k in July 2011, your mortgage today will be written down by €12k.

So if your mortgage balance today is €62k , they will write it down by €12k and you will only owe €50k

2) You will receive a refund of the interest you paid on the €12k capital write down.
This is a long complicated calculation, but my rule of thumb is that it will be about 4% of the mortgage balance on the date the fixed rate ended.

So if you had a mortgage of €100k in July 2011, you will get a cash payment of €4,000

I must stress that the 4% estimate is my figure. It could be a bit more or a bit less depending on what date your fixed rate ended and what interest rate you were on. I would say that 90% of borrowers will be between 3% and 5%.


Will the €1,615 be deducted from the redress?
No. The Ombudsman directed that it be paid in addition to the redress.

Under the other schemes, borrowers got 15% of the overcharge as compensation for stress. Will we be getting this as well?

The Ombudsman made no provision for such compensation. AIB might choose to pay it to head off claims.

What can I do if I am not happy with the redress scheme?

You can make a complaint to the Ombudsman. However, as he has ruled on this case, he is unlikely to change his ruling.

You can take a complaint to the High Court.

When will I get it?
AIB will write to you and presumably pay you the redress in "July or August"

Do I need to do anything to get it?
No it will come out to you automatically.

Can I take cash instead of the write-down?

No.

I came out of a fixed rate before they had withdrawn trackers and fixed again. What is the relevant date for the calculations?
Say your first fixed rate ended in March 2008. You were offered a tracker, but you fixed for three years, which expired in 2011.

AIB complied with their contractual obligations in March 2008.
But they broke their contract with you in March 2011, so that is the relevant date for the calculations.

Will I be getting a tracker mortgage from now?

The Ombudsman did not direct AIB to put the borrower on a tracker mortgage for the rest of her term.
So if AIB follows the Ombudsman's decision, they will not offer you a tracker mortgage.

However, if AIB has any common sense, they would offer customers a tracker rate of 1.5% to avoid dragging this out through the courts for many years to come. But AIB has shown no common sense to date, so I don't expect them to do so now. The Central Bank might encourage them to do so.






What will happen to customers currently in arrears?

The reduction in balance by 12% would represent about two years payments, so in most cases, this will wipe out any arrears on your account.
 
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I paid off my mortgage 3 years ago

You should get the 12% write down in cash and you will also get interest on the write-down from then to now.

AIB deemed my mortgage unsustainable. How will they compensate me?

The Central Bank will require them to set up a scheme for you.

It will depend on the circumstances. We just have to wait and see.

I have a split mortgage.

Again, we will just have to wait and see. In fairness to AIB, they should reduce the warehouse by the amount of the write-down.

However, I suspect that they will write down the active part of the mortgage.
 
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Thanks for the response. I did read the FAQ and saw that info, but I was looking to know what were the precise conditions that resulted in people being in this cohort and getting the letter in 2018 in the first place. If there is a summary document explaining the conditions somewhere, I'm happy to be signposted to it. Thanks
 
Brendan today I was ringing the helpline in A I B when I noticed F s P o reduction in my mortgage of 27/765 no letter received as yet but a would like to thank you for all the hard work you did for all the 5907 mortgage holders
 
I rang as well today, again no help at all, just said we got the 12% and explained that someone went to the ombudsman and AIB then decided themselves to apply the ruling to everyone else ! Said the original cheque in 2018 was our compensation. they couldn't tell me why 12% or how much interest I would get back. They said no change in rate going forward and no further compensation. Couldn't explain any figures at all and said to wait for the letter.
Brendan a huge thank you to you for everything you have done in this fight, I for one an extremely grateful to you!

Do you think making a complaint to the ombudsman about not being place on a tracker rate now would be of any good at all?
 
Do you think making a complaint to the ombudsman about not being place on a tracker rate now would be of any good at all?

 
I cleared my mortgage last year but was one of those people who should have been offered a tracker after the fixed term expired, received compensation letter in March 2018 etc advising same. Does anyone have any idea whether i'm entitled to any of the 12% write down now given i sold my apartment and the mortgage is cleared?
 
Hi Brendan,
Firstly, you're probably sick of all the thank-yous at this stage, but anyway here is another one from me and my family.
Thank You! so much for all your hard work in fighting this on our behalf. It has helped us hugely in so many ways.
 
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When were tracker mortgages stopped as I got an AIB mortgage in 2010 and was never offered a tracker mortgage they put me on a fixed 4.3 % rate fo 3 year mortgage. should I have been offered a tracker once that finished as they only offered me a variable or another fixed one at 3.9 %

thanks
BOB
 
When were tracker mortgages stopped as I got an AIB mortgage in 2010 and was never offered a tracker mortgage they put me on a fixed 4.3 % rate fo 3 year mortgage. should I have been offered a tracker once that finished as they only offered me a variable or another fixed one at 3.9 %

thanks
BOB

Hi Bob , it all depends on your mortgage contract which you need to check .

To qualify, you must have a specific Clause 3.2 in your contract.

3.2 FURTHER FIXED INTEREST RATE OPTIONS/CHOICE

At the end of any fixed interest rate period, the Customer may choose between:
(a) a further fixed interest rate period, or

(b) conversion to a variable interest rate Mortgage Loan, or

(c) conversion to a tracker interest rate Mortgage Loan,

at the Bank's then prevailing rates appropriate to the Mortgage Loan. If the Customer does not exercise this choice, then the Mortgage Loan will automatically convert to a variable interest rate Mortgage Loan.

So you have to meet all of the qualifying criteria
1) You had Clause 3.2 in your contract
2) You were on a fixed rate which expired after October 2008
3) They did not offer you a tracker rate.


If you do not have this clause, you are not covered.
 
Hi Brendan,

I took out my mortgage in 2005, mortgaged in 2006 for home repairs. I received the cheque for €1615 last year. I have received the 12% write down on the remortgaged amount but not on the principal mortgage. Will I qualify for any reduction on this?

Apologies of this has been answered in another thread I just couldn't see any similar cases from others who have posted.
 
Hi Brendan , if you took out a standard variable rate mortgage with AIB in 2006 and never fixed it till now, never received the AIB compensation cheque last year, I take it then your not going to be included in any of the redress scheme ?
 
I take it then your not going to be included in any of the redress scheme ?

 
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