When the Tracker facility was launched by AIB from 2002/2003 onwards, the Bank essentially introduced a second "variable" onto the mortgage market. AIB described the Tracker variable rate as follows
“A Tracker Rate mortgage is a variable rate product that provides customers with certainty on their margin over the European Central Bank (ECB) rate for the life of the loan. The Tracker rate incorporates a set percentage above the ECB rate and the Tracker Mortgage will “track” changes in that rate. While the overall rate will move in line with the ECB rate, the customer’s margin will remain the same. More customers are opting for Tracker rates given the certainty on the margin it offers them, coupled with the flexibility to switch to a fixed rate at any time”. The highlighted conditions formed the basis of all pre March 2006 Tracker mortgage contracts and consequently, all Trackers should have been restored at the end of fixed periods (we shouldn't even be involved in this review!)
The Clause 3.2 scenario is a farce. The variable that is set out clearly in the contract (CBI Framework identified this as a crucial factor) is Tracker variable. Logically, how could "variable" in Clause 3.2 mean SVR when SVR has no frame of reference in the whole of the mortgage contract?? AIB are chancing their arm and getting away with it to date. Hopefully, there may be some clarity on these issues on the 4th of April. I have forwarded direct questions and encourage others to do the same. AIB have brushed aside the CBI Framework guidelines i.e. the unacceptability of "dual meaning" (as in Clause 3.2) and "influencing factors" as in all aspects of the mortgage agreement. AIB are depriving hundreds of people of their Tracker rate, based on one word (with dual meaning) in one clause!!