Key Post Successfully appealed NIB's increase in rate on investment property

Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg

Hi Butter,

finished with Branch, waiting on next phase to progress... i got legal advise from a friendly lawyer on what to say, drawing on the ombudsman's report as suggested here...I will let you know what happens as soon as I hear....

Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg

I received my reply from NIB today. They are satisfied that my loan agreement has been treated in accordance with the terms of the agreement between us.

If I am dissatisfied with their response I can now take the matter to the Financial Services Ombudsman.

They say that changes in their reporting obligations to the authorities resulted in them changing the product name last February, but that this did not alter the contract.

They confirm that my mortgage rate will never exceed their Variable Annuity and Endowment Rate.

However, it goes on to say that the bank's Standard Variable Rate is currently 4.15%. In Spring 2009 the bank "exceptionally extended a discount to rates charged on family homes, which resulted in the rate charged being reduced to 3.4% in August 2009. This discount does not apply to my loan as it does not meet the criteria for qualifying for that discount."


To be honest I am absolutely astonished at the fact that NIB think they can retrospectively announce an exceptional discount to home owners mortgage rates. This is supposed to have been decided in "spring 2009" and resulted in rates being reduced to home owners in August 2009.

I would love to know if NIB wrote to any of their home loan customers in spring 2009 to announce their generosity. Did they write again in August 2009 to announce the rate reductions, again due to their exceptional generosity (not of course due to reductions in the ECB lending rate)? The fact that their generous reduction of 0.75% is exactly the same as the three ECB rate reductions is not mentioned.

It's a good job that I am typing this as I am speechless!!! Can this type of retrospective justification really be allowed to go unchallenged???

Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg

Butter said:

It's a good job that I am typing this as I am speechless!!! Can this type of retrospective justification really be allowed to go unchallenged???

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Well aren't you up to the challenge. Sure you are. That's what they are counting on, people being complacent and regulators not doing their job. You now just have to do a well drafted letter of complaint to the regulator.

Apart from the shocking (I'm not shocked at any underhand bank tactic) behaviour of this bank, what is more shocking in the lack of direction from the regulator. It's not very heartening if he is just responding on a case by case basis instead of hauling NIB in for a 'chat' and giving out a statement to the media about how underhand methods of dealing with customers will not be tolerated by his office and how his office is being proactive in the interest of consumers..

Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg

Hi Butter
I am speechless!!

There was no mention of this 'discount' in any of the earlier letters from the bank. It is clearly something they have recently dreamed up to get try to get away with this overcharging.

I was generally very impressed with the action of the regulator to date but, like Bronte, cannot understand why the regulator cannot instruct NIB to reverse the decision in all cases, surely its a waste of resources to be investigating the same complaint over and over again.

I cant believe the cheek of NIB, if there was such a 'discount', why was is not announced at the time? And why was the title of our mortgage changed, surely there was no reason for this?

Best of luck going forward Butter

Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg

Hi buzzmolloy, bronte and tomorrow - thank you for the responses.

Apologies for the long post in advance!

buzzmolloy - NIB says that the discount should not apply to my loan as it does not meet the criteria for qualifying for that discount (the discount to the rate charged on loans secured on borrower's family homes). I assume they mean the criteria is having a home loan. However prior to this NIB had only one home loan rate and did not differentiate between home and investments loans.

Bronte - I will do my best with this one - I am so annoyed that a bank thinks that this is acceptable behaviour. I can understand that times are tough and they made bad decisions and are trying to boost their bottom line. To me this retrospective justification goes beyond shocking and underhand. I would love to say exactly what I think but won't on an open forum.

I would like to see the letters that NIB sent out to customers last spring announcing their exceptional discount to home loan borrowers. Does anyone know of "the recent changes in the reporting obligations to the authorities requiring banks to classify loans by type"?

I will be pushing the regulator to deal with this in a wider context than just my case alone. I also feel that it is the type of banking story that the media should be made aware of. I realise that the fact that I have an investment property mortgage would make a lot of people unsympathetic, but this has ramifications for all mortgage contracts. If this is allowed, then what is to stop other banks renaming mortgages on some spurious cause and altering interest rates?

Tomorrow - I agree - why was the generous discount not announced at the time? I would be interested in talking to anybody with an NIB home loan to see what was in the letter NIB sent them last year when interest rates were dropping. Have you had any more news on your case?

Finally does anyone involved in this process with NIB want to correspond by pm and exchange email addresses? I would be happy to do so. Perhaps at this stage the open forum is too open?

Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg

Hi Butter.

I am totally new to this forum but I am in exactly the same position as you in relation to NIB's change of name of investment property mortgage. I sent in my letter of complaint to my branch manager about a month ago. I would be interested in exchanging email addresses.

Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg

Butter said:

Hi rasher - I have sent you a pm.

Tomorrow - I've also pm'd you - thanks.

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Guys can you PM me as well. I like to know how it's going and how you are taking on your financial institutions.

Coincidentally I've come off a fixed rate myself with a different bank and I've been offered 4 options of fixed at investment rates, an option of variable at investment rate and an offer of the ordinary variable. Because of this thread I went back recently on my files and I had a 'residential mortgage' on an investment property which I initially fixed and then fixed again (this later offer mentioned investment rates) but at that time the investment rates were so good I didn't even look at my original mortgage offer.

Butter in your letter can you ask the regulator if this matter has come up before (something along the lines of 'has the regulator's office encountered many instances of NIB changing mortgage rates from home loan rates to investment rates'), his reply will be interesting because we know he certainly has. If he replies yes then you can ask why hasn't he directed NIB to cease this despicable policy so that people like you don't have to take cases to him and also to cover people who are so afraid of their banks that they don't know how to do something about it and just accept whatever the bank says.

Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg

In relation to this can someone tell me what is the difference between RIP mortgage, PDH mortgage and home loan? RIP I'd kind of heard of before but PDH is new to me. I've started off a letter of complaint myself.

I've also noticed recently on a certain bank website any amount of confusing rates and names for standard variable rate.

Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg

Hi all,

Do you have any update on this? I have just recently come off a fixed rate for my invesmtent property and am on the higher standard variable rate. Please let me know how the situation is advancing on trying to get the bank to put you on the lower 'correct' standard variable rate.

thanks in advance.

Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg

Hi,

What does your contract with the bank say. This seems to be different to the other cases.

Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg

Jugovic,
I've no news currently as my bank have gone to look in their archives for my original mortgage documentation. It'll be interresting what reply they give me to my query on interest rates.

What type of mortgage type did you have originally, you have home loan interest rates or investment rates?

Hi everybody. I have only joined Askaboutmoney today. This is my first post. I have just been round the block with my investment mortgage at NIB. The ombudsman has found in favour of the bank. I am curious to know if any of you have been able to progress from this point. Has anyone pin pointed the difference between the successful cases and the unsuccessful ones? Would be happy to join up with any discussion you might be having on this.

The Ombudsman’s decision is legally binding on both parties subject only to an appeal to the High Court within 21 calendar days.

I believe the Ombudsman’s decisions are rarely overturned by the High Court, so other than going down this costly route I don’t think you can progress this matter any further.

I would think the successful cases are simply those whose terms and conditions offered the home loan rate that was subsequently changed to the higher investment rate.

Thanks twofor1. Just feel that the bank should not be allowed to interpret the contract solely in their favour. I seem to have all the disadvantages of a fixed rate mortgage (which I chose not to take) and none of the advantages of a variable mortgage. I was told that when interest rates rise You have to pay more but when they fall you have the benefit of lower repayments. That is a quote from the NIB website. All my discussions in advance of transferring my business to NIB were based on the ecb base rate. It stood at 2% when I joined and I paid 3.25% at that time. It now stands at 1% and I am paying 3.91% ( I receive a .24 discount on the variable rate. It states in my contract that the bank can alter rates in response to market conditions. Falling rents, less tax relief on rental income, new 2nd home taxes, unemployment, falling wages and deflation are all market conditions affecting landlords. These have been totally ignored. I have some experience in France and Germany and I don't believe that this type of wishy-washy contract would carry any water. Serious dangers to the client must be clearly worded and flagged. I don't see any provision in the contract for this type of increase. I am not a legal person but am convinced that this is wrong. The high court is not an option but maybe the European commission for consumer rights or competition. They might view it from the point of view of how things are done in normal countries. I would welcome any ideas. Even if it is just to say that it is a non runner. Thanks again twofor1 for your reply

Mine is ongoing. Currently waiting for another response from my bank. No details until it is finished. After this I'm expecting their 'final' response letter and then to the ombudsman/regulator.

In my case I don't need to fight them as the interest rate I have is good, but it's a point of principal with me about how big banks manipulate little people.

I've received an 8 page final response letter and now have to go to the Ombudsman. They have ignored most of what I wrote in my letter of complaint. They have lost registered letters. They say that my property is 'classified' as an investment so investment rates only apply. And investment property can only have investment rates. In my case I reverted to the standard variable which applies also to principal private residence mortgage but they also offered me an investment variable which was higher and investment fixed rates which are higher than home loans fixed rates. I don't agree with their reasonings on why they haven't offered me home loan fixed rates. They say that I was on an investment fixed rate at the beginning (it's not in any correspondance nor written in the contract) and then in error years later I had a fixed rate at home loan rates (which was sent to me in error).

Coincidentally another fixed rate mortgages ended and the letter with that offered me home loan rates. It was originally my home but changed when I moved abroad to an investment, with notification to the bank, but I believe as it's older different 'classifications' in the banks systems means it's treated differently.

Luckily I'm at no financial loss as the variable rate for the past year has been much lower than the fixed rates.

Hi Bronte

I am confused. Have you lost due to their behaviour? Or, are you likely to lose?

If not, then you should not be complaining. There is a huge backlog in the Ombudsman's office and your complaint will delay others.

Brendan

Hi Bronte, are you with another bank (Ulster Bank)

It is probably different to the NIB case discussed in this thread.

I have a tradition of going for fixed rates. The bank is only offering me investment fixed rates, not residential fixed rates. That is my fight with them. Plus I believe they are changing my contract with me and others without people being given proper advice on the very serious change to a contract. To sign the original bank offer I had to have independant legal advice to get the mortgage in the first place and I consider that if they are changing me from residentail to investment that it is a very serious matter. That banks are going to go after investers and have already done so by hyping those rates.

What I have not been able to figure out is why I go to the standard variable residential rate and not the investment variable rate (this rate was also offered to me and it's much higher)

Because I moved automatically to a residential standard rate more than a year ago I am not at a financial loss. That rate costs me less than had I fixed with any of the fixed rates on offer.

To further complicate matters I have another investment property and for this they offered me residential fixed rates. Those are the rates I wish to be offered for the other property.

As for the delays in the Ombudsman's office being a reason for not doing anything. Don't get this. Not my fault that the banks have so many complaints against them. I don't like the inference that banks can just willy nilly change the contract I have with them as I consider it shoddy practice that should be called to a halt.

@nibrob.

Did the bank ever send you a letter probably around Feb 09 saying that they were changing the name of your loan. Or when you took out the mortgage did the home loan rate apply to the mortgage.

I think the interest rate increased on the investment mortgages not the home loan mortgages. The successfull posters here would have had the home loan rate applied to an investment mortgage from the outset and then the NIB tried to move them onto an investment rate which is a new rate for NIB.

Around Feb 09, NIB done an audit of it's loan book from what I can figure out and recategorised some of them that were previously at the home loan rate to an investment rate.

It was on the basis of this change from home loan to investment loan that the posters argued and won as it was a change in the terms and conditions.


The chances are if you took an investment mortgage before Feb 09, they would have given you a home loan.

I had a successful outcome against the NIB on this. If you would like to PM me I would be able to advise. I can then go through the specifics of my case.