LTV Fixed tracker worry

Hi All

We have a great LTV tracker with NIB that is based on an 80% LTV.

Given the current state of the property market, out house has fallen in value to an extent where our real LTV, 15 months later is closer to 90% although we have not had a valuation.

My fear is that NIB could withdraw our current LTV rate and place us on a variable without notice or without giving us the chance to pay some capital off to keep the LTV at 80% and maintain the .59% tracker margin.

The terms we have from them on this indicate the following:

In the event that your LTV increases above 80% at any time during the term of your LTV mortgage, we reserve the right to convert your LTV rate to our then applicable home loan rate (fixed or variable as the case may be). Your LTV rate at the date of drawdown of your loan will be our LTV rate (fixed LTV or ECB tracker LTV as the case may be) applicable at that date.

I understand the principle here but need to understand if they can or will do this without any discussion with us. We could pay some capital off to maintain the LTV. If we, the borrower, wanted to renegotiate based on lower LTV, e.g. 60%, we would have to approach them with new evaluations etc. Is the same Onus on them if they feel the LTV is above 80%????

I am in the same boat as you, I have a good NIB tracker mortgage but it was initially based on a house value that is obviously no where near to what it is today.

However I wouldn't be too concerned. NIB couldn't just change the terms of your mortgage without at least getting a new valuation which would require access to the inside of your house. So you would surely have to agreee to the valuation. At that point I am sure you could pay off some captial to keep the LTV at the same ratio.

Also, I read an article in the sunday business post from November 2008 that said...

"Kevin Gallen, deputy chief executive of NIB, said the bank would not seek to revisit the margin on existing mortgages if a customer’s LTV increased. Gallen said NIB would not ask existing customers to pay a higher rate if their LTV went above the threshold at which a higher rate would be charged to new customers. "


link to the article... [broken link removed]

That is reassuring news as I also have a tracker of .5 above ECB with NIB. I had been thinking of this too if they could move me.