AIB I broke out of my fixed rate early

Brendan Burgess said:

I have not come across one of these cases but they probably exist and there is a complication.

As I have said in another thread :

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

AIB claims that they reintroduced the prevailing rate at ECB +3.75% in December 2013 but didn't offer it to people.

So if your fixed rate expired after December 2013, AIB could claim that they had a prevailing rate and could redress you at that rate.

If you had multiple fixed rate periods, this does not apply to you
Let's say you drew down the mortgage in 2008 and fixed for two years until 2010.

Then you fixed for 5 years to 2015.

AIB's failure was in 2010 and you will get the full redress.

Brendan

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Brendan does it matter what the nature of the end of the fixed rate was? Did it have to expire naturally as per the term or if you broke out early would the same issue arise?

sorry if worded poorly. From what I understand I am included I am just trying to ascertain the likely timeframe for the capital amount in question (for quick redress calculation) as we had multiple rate changes over term of mortgage.

mortgage fixed in oct 08 for 3 years at 5.2%. At that time the financial sector was beginning to fall apart and rates appeared to be nosediving so we broke out and went on svr at I think 4.5%

will there have been the same onus on AIB to offer tracker if you broke out of agreed fixed rate early?

we had clause 3.2
I requested all info from AIB to go through all rates etc.

is it really just the first fixed rate from oct 08 that is the issue and subsequent rates (fixed, variable or other) are irrelevant?

also does it make any difference if any of these were interest only or had a moratorium built in? (Not in arrears)

thanks and sorry for multiple questions

You fixed in October 2008 for three years.

So if you had stayed in your fixed rate, you would have matured in October 2011 and that would be the date.

If you broke out in mid 2009 for example what will happen?

Not sure. I doubt AIB will argue but they might. There are three scenarios

1) Your fixed rate did not end - so you do not qualify
2) Your fixed rate ended in mid 2009, so that is the effective date.
3) Your fixed rate ended in October 2011 so that is the effective date.

Did you get the €1,615? If you did, I doubt AIB will argue Scenario 1)

If they argue Scenario 3) , you will need to appeal it or go to the Ombudsman.

Brendan

Brendan Burgess said:

You fixed in October 2008 for three years.

So if you had stayed in your fixed rate, you would have matured in October 2011 and that would be the date.

If you broke out in mid 2009 for example what will happen?

Not sure. I doubt AIB will argue but they might. There are three scenarios

1) Your fixed rate did not end - so you do not qualify
2) Your fixed rate ended in mid 2009, so that is the effective date.
3) Your fixed rate ended in October 2011 so that is the effective date.

Did you get the €1,615? If you did, I doubt AIB will argue Scenario 1)

If they argue Scenario 2) , you will need to appeal it or go to the Ombudsman.

Brendan

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Apologies Brendan, I’m not sure I follow. Why would an appeal be necessary if Scenario 2) is applied? Surely this is the best option for the customer? (ie it will entitle the customer to a longer time on the notional tracker rate that would have applied, and therefore a greater reduction?)

Brendan Burgess said:

You fixed in October 2008 for three years.

So if you had stayed in your fixed rate, you would have matured in October 2011 and that would be the date.

If you broke out in mid 2009 for example what will happen?

Not sure. I doubt AIB will argue but they might. There are three scenarios

1) Your fixed rate did not end - so you do not qualify
2) Your fixed rate ended in mid 2009, so that is the effective date.
3) Your fixed rate ended in October 2011 so that is the effective date.

Did you get the €1,615? If you did, I doubt AIB will argue Scenario 1)

If they argue Scenario 2) , you will need to appeal it or go to the Ombudsman.

Brendan

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thank you so much. Yes we got the €1615. I was just wondering if breaking out of fixed rate made a difference to the potential calculations.

Jayom75 said:

Why would an appeal be necessary if Scenario 2) is applied?

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Thanks
Typo. Fixed now.

Brendan

rustbucket said:

I was just wondering if breaking out of fixed rate made a difference to the potential calculations.

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Yes, it does make a difference, but not a huge difference.

You get 12% of the balance.

The earlier the date, the higher the balance so the higher the 12%.

And you get interest from an earlier date.

Both of these are quite small.

Brendan

Brendan Burgess said:

Yes, it does make a difference, but not a huge difference.

You get 12% of the balance.

The earlier the date, the higher the balance so the higher the 12%.

And you get interest from an earlier date.

Both of these are quite small.

Brendan

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Thank you. I was slightly worried about option 1. I know I am in the cohort but thought they might say that because we broke out it made the terms different.

AIB is handling this very stupidly and incompetently, so nothing would surprise me at this stage. They should not claim no. 1) but, to be honest, it's the type of stupid argument they make.

However, that was the basis of the ptsb case which kicked off the whole tracker review.

People broke out early and ptsb refused them the trackers they would have got if the fixed rate ended naturally.

Either the Ombudsman or the Central Bank ruled that ptsb should have advised the customers of the implications of the early break.

So if AIB does try that on, then you can go back and get the ptsb cases and use that to go to the Ombudsman or the Central Bank.

Brendan

rustbucket said:

Thank you. I was slightly worried about option 1. I know I am in the cohort but thought they might say that because we broke out it made the terms different.

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I got a mortgage in or around October 2008 and almost immediately broke out of my fixed rate, for precisely the same reason as you - svr rates were cheaper. I paid a breakage fee to get out. It would, I’d imagine, be very hard for AIB to not offer compensation after having charged me to go from fixed to variable. Section 3.2 is clear that at the end of any fixed rate period, a tracker was to be offered. This didn’t happen.

Jayom75 said:

I got a mortgage in or around October 2008 and almost immediately broke out of my fixed rate, for precisely the same reason as you - svr rates were cheaper. I paid a breakage fee to get out. It would, I’d imagine, be very hard for AIB to not offer compensation after having charged me to go from fixed to variable. Section 3.2 is clear that at the end of any fixed rate period, a tracker was to be offered. This didn’t happen.

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that is exactly the same as my situation. It was just the recent comments from AIB helpline according to recent posts made me wonder would they look fo any way not to redress those within the existing cohort. I hope not

rustbucket said:

that is exactly the same as my situation. It was just the recent comments from AIB helpline according to recent posts made me wonder would they look fo any way not to redress those within the existing cohort. I hope not

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The fixed rate period by definition came to an end once AIB accepted payment for the breakage and started charging the variable rate. It would be extremely hard (ie nonsensical!) for them to argue that the fixed periods continued beyond the occurrence of those events.

Jayom75 said:

It would be extremely hard (ie nonsensical!)

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But they are infamous for nonsensical arguments

e.g. "It was a service failure and not a breach of contract"
"The tracker rate would have been 12% but the SVR was only 5% so they did not lose out"
"We stopped offering trackers to new customers so we no longer had a prevailing rate."

Brendan

Brendan Burgess said:

But they are infamous for nonsensical arguments

e.g. "It was a service failure and not a breach of contract"
"The tracker rate would have been 12% but the SVR was only 5% so they did not lose out"
"We stopped offering trackers to new customers so we no longer had a prevailing rate."

Brendan

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Alas Brendan, you are of course correct. As I typed my initial response it dawned on me that nothing is impossible with these folks.

Guys I'm in the same boat fixed for 3 years in August 2008 and broke in October/November 2009. I called the helpline one of the fist days it opened and was told I was included. The helpline is there so AIB can say they have one nothing more, may be of some use when cheques start to arrive but probably not so I'm just sitting right for now.