AIB I am stuck on a 5 year fixed rate with AIB

M

misstealeaf

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So on this I have a similar issue. I have just been onto the helpline and i'm not too happy with the answer. I fixed in 2018 for 5 years so still 3 years left to run. Recently requested the break cost and it was hefty enough.

Anyway I got the reduced capital applied to my account last night so I wanted to know what rate I would be paying going forward. The lady on the phone indicated that the FSPO decision said nothing on rate and therefore I will be stuck into the remaining fixed rate term out to 2023. I have a number of issues with this and I plan to make a complaint to AIB (however based on previous records I don't think this will get me anywhere.

1. 2 years ago when I was fixing HAD I known that my capital balance would be reduced and my monthly mortgage repayment I would not have fixed. As a result of this I am now in a better financial position monthly and in a position to overpay my mortgage each month but I had no way of knowing this would be the case.
2. This issue in (1) and the reducing of my capital balance is a direct result of an 'error' by AIB.
3. If I was to pay a chunk of capital off my fixed rate mortgage I would be required to pay the break cost so in my view as AIB have paid a chunk of capital off my fixed rate mortgage the fixed rate should be broken with AIB bearing the cost of this.

By holding me into the fixed rate, which I selected based on my information at the time but in the absence of a view as to the future capital deduction stemming from AIBs error, I am now unable to make additional monthly contributions to my mortgage to reduce the remaining term of the mortgage - this being one of the key benefits afforded under the outcome which we've received.

I'd like honest opinion on the above argument and whether or not you would view it as something worthwhile to pursue with AIB?
 
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Let's say that your mortgage in 2018 was €200k. And that you got a write off today of €40k to bring it down to €160k.

If you had a mortgage of €160k in 2018 why would you not have fixed that, if you fixed €200k? I am struggling to see the rationale?

In other cases, where the bank put people back on a tracker, they can clearly make the argument that they would not have fixed at 5% if they had been on the correct rate of 1%.

But I don't see why the amount of the mortgage affects the decision.

Brendan
 
If your argument is that you could have afforded to pay more, then a fair compromise would for AIB to shorten the term of your mortgage without charging you a penalty.

They might well agree to this.

I think it would also be reasonable for you to argue that you should be allowed to pay the interest refund which you will receive in cash against the mortgage without penalty.

Brendan
 
Yes that’s my rationale Brendan. My monthly allocation from a cash flow perspective was c.1200 a month, had I known my repayment would be lesss than this which it now is by c.200 I would not have fixed and kept the flexibility to increase my payments when I wanted to. I will now have c.200 a month excess that will earn nothing for me excess wise so it would make most sense to pay this off debt. Had AIB not written down my capital by the amount today this would be a non issue for me as I wouldn’t have the spare cash each month going forward but given that their action had given rise to this I think it won’t only be fair to allow me pay it off the balance each month. I’d be happy to be allowed to do this and even stay on the same fixed rate.
 
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