mortgage question, tracker ECB rates

K

korpy

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I have a buy to let mortgage taken out in 2004 for 20 years from AIB, at ECB + 1.4%, the last 2 years they agreed that I pay interest only and now they tell me I have to make full repayment or sign a new loan contract at higher rates ( variable rate ) .
Is the bank obliged to extend to me 2 more years ( the time I spent on interest only), on my remaining years being 15 years to 17 years, and then I would be able to make full repayments and keep my tracker ECB rate?
 
Banks are doing this across the board. Your original agreement was probably for 15 years including 2 years interest only. As this was on the loan offer, you have agreed to this contract. However if you wish to alter the terms of the loan by going for another 2 years interest only, you are effectively starting a new contract, which empowers the bank to charge a new rate.
Commercial banks are doing this wholesale and in most cases are charging a fee on top of this as they know that lenders have no other option
 
Thank you for KFB123. Here is the story, my loan is for 20 years, started on 2004.
In 2004, 2005, 2006 I made full repayments , in 2007, 2008 they agreed interest only repayments, now they want me to pay again fully for the remaining term of 15 years. Because I paid 2 years interst only do I still have 17 years of contract or only 15 years?
 
I would presume 15 years, but again it depends if they got you to sign a new loan offer. Was a new loan offer issued to you 2 years ago? If there was, this would detail the term of the mortgage
 
OK, well then the bank are correct. They can put you on full repayment or give you another 2 years interest only, albeit with a higher rate. They are all at this as it is another way of making money from the smaller customer while the larger clients are holding up the whole banking system :mad:
 
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