SVR Query

Hi all,

In light of recent court case and article in today's paper quoting Brian Hayes saying that our Banks are ripping off SVR mortgage holders, I have my own situation that hopefully somebody might shine some light on.
Both my wife and I worked in AIB for a brief period in the early noughties. We took out our mortgage with them in 2004 through staff business on a one year contract on an Interest only basis and received staff rates. We both left employment in 2005 but the Bank never contacted us to come off the Interest only option. It was not until c. 2008 that they phoned me and told me that I must come off staff rate and they put me on a variable At that time, I enquiried with my local branch about taking out a tracker but was advised that it would cost be a 'few grand' in legal fees to move from staff business to normal residential mortgage as the Bank had not taken a proper hold of the deeds of the house from the outset. I left it as I didn't have the money.
My question is would I have a case to get out of my SVR on the basis that my mortgage should have been move from staff business to ordinary residential when I left employment and I should have been given an option of a tracker at that time?
In light of recent developments, I can't get this out of my head now. I'm sure I am but one of the many SVR mortgage payers that is sick of being made pay for the Banks losses on trackers.
Any help would be appreciated.

Hard to know what you are asking.
You were on staff (preferential) rate for 1 year on interest only as you were working there. Even though you left in 2005 they kept you on staff rate till 2008. When they contacted you were not offered a tracker and accepted SVR. Are you saying you should have been given a tracker and as you queried and were told it would cost a few bob to change to a residential tracker you decided to accept the SVR ?

Given that you both worked in the bank did it not occur to either of you to take the initiative in 2005 and move to a tracker? Or were you happy to stay on interest only for as long as you were able to get away with it?

elcato said:

Hard to know what you are asking.
You were on staff (preferential) rate for 1 year on interest only as you were working there. Even though you left in 2005 they kept you on staff rate till 2008. When they contacted you were not offered a tracker and accepted SVR. Are you saying you should have been given a tracker and as you queried and were told it would cost a few bob to change to a residential tracker you decided to accept the SVR ?

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The only way that i could have gone onto a tracker rate was to move the mortgage away from staff business to their normal residential suite of products. However, as they had only taken a verbal deposit of our deeds at the start and not implemented the security properly, i was told in 2008 that in order to get a tracker (and move my mortgage away from staff business) it would cost me a few grand to get the security updated. I choose not to do this as there would have been a cost to me. In hindsight, if I had known what they were going to do with the SVR, i would have done it obviously!!
My question is, in light of this, were they negligent in not taking the security properly and thus not giving me an option to take a tracker unless I was going to pay for updating the security.
My mortgage is still with the bank's staff business section.

No! You are only wasting your time with this issue!

I'm not familiar with the security issues with deeds on this so thanks for clarifying. I really don't see how they could have been negligent so I would side with Brendan on this.

emeralds said:

Given that you both worked in the bank did it not occur to either of you to take the initiative in 2005 and move to a tracker? Or were you happy to stay on interest only for as long as you were able to get away with it?

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Easy to say in hindsight emeralds, but 2005 was a very different world to now. When I did enquire about moving to the tracker I didn't have the option, not because they had disallowed trackers but because the security for the house was taken correctly at the outset and to correct this would cost me money (I didn't have).

44brendan said:

No! You are only wasting your time with this issue!

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Hi Brendan,

Why do you think I would be wasting my time??

In 2005 we took out a mortgage. We researched our options and educated ourselves as to what a tracker was. I also had previously worked in a bank and had a previous mortgage at preferential staff rates. The information was there if you went looking for it.

Hi NK87230,

what is the rate of the preferential staff rate/staff business rate?
what is the difference in monetary terms between paying your mortgage on the staff rate compared to SVR?

This info will determine whether it is worth pursuing or not.

NK87230 said:

i was told in 2008 that in order to get a tracker (and move my mortgage away from staff business) it would cost me a few grand to get the security updated.

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They informed you of the options so no case to answer unless you feel there was no cost involved in getting the security updated. From past posts Brendan has experience of how banking works so I would imagine his advice to be a good call and that this cost would have been a factor rather than a fob off by the bank.

There would have been a cost in actually setting up a new mortgage, that is what they meant. They did the initial mortgage by way of deposit of deeds which is not the same as a mortgage and is a legally cheap way of doing it, you benefited from this saving day one and it was probably the way they did their staff mortgages. It's not that they didn't do it right, they simply chose a different way which is still used today in some circumstances. When you wanted to go with a tracker you would have had to set up a brand new mortgage legally as though you were buying the house again, they advised you there would be a cost, you didn't go for it, your choice.

Hindsight is marvellous, tracker was just another option on the forms at the time, very few could have imagined how valuable they would have become.

NK87230 said:

Why do you think I would be wasting my time??

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I agree that nothing is certain. However, you are assuming that the bank should have taken the initiative in offering you a tracker rate when you moved from the staff rate. There is no indication from your post that the bank deliberately forced you on to a SVR and trackers that were at that time freely available to other borrowers were denied to you! If you can make a case that you specifically were denied a product which was freely available to others then you might have a case. This is not evident from your post!