EBS What does an EBS "Variable Base Rate" mortgage mean?
- Thread starter tonymac
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Lodged a complaint via the EBS Helpline regarding the Variable Base Rate which the helpline confirmed today does not mean ECB rate. The helpline told me the Variable Base Rate is the EBS term for standard variable rate and that in 2005 that was the phrase they used to describe standard variable rate. I told them it wasn't. They told me it was. I said you use the term prevailing variable rate elsewhere which indicates standard variable rate, at that time. I then told them look at my loan agreement where it states the fixed rate which then reverts to a quoted variable base rate (EBS maintains this is the standard variable rate applicable on the day) - followed by the Tracker paragraph quoting the ECB margin. EBS told me that it didn't apply to my mortgage, it was just a mistake that it was put there. And so it went in circles.
I asked EBS what the Variable Base Rate was if it wasn't a Tracker rate and they said is "it is the base rate that follows EBS base rates which is the standard variable rate". I told them that was nonsense and that base rate refers to a central bank rate (thank you all for the preceding info!).
I laughed when they said dismissively, if I was right then LOADS of people would be affected ....so therefore I am wrong because if I am right, well then it isn't great for EBS. I'm thinking EBS have had training from the Fake News people. There is "no time frame for my complaint, it will be investigated but it will take as long as it takes to investigate because investigations take a long time...."
I asked EBS what the Variable Base Rate was if it wasn't a Tracker rate and they said is "it is the base rate that follows EBS base rates which is the standard variable rate". I told them that was nonsense and that base rate refers to a central bank rate (thank you all for the preceding info!).
I laughed when they said dismissively, if I was right then LOADS of people would be affected ....so therefore I am wrong because if I am right, well then it isn't great for EBS. I'm thinking EBS have had training from the Fake News people. There is "no time frame for my complaint, it will be investigated but it will take as long as it takes to investigate because investigations take a long time...."
If it wasn’t a tracker and it was that clear cut it wouldn’t be included in the Central Bank tracker review and this wouldn’t be an “issue” that the CBI are continuing to discuss with EBS. EBS were also similarly categorical in their denial of the “issue” that led to 500 customers eventually being redressed. I’ve attached the recent CBI appearance at the Oireachtas that might offer a bit of clarity about where the variable base argument is at present.
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haveaniceday
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YerGrand - you may have seen my previous post - but about 2 weeks ago when my relative called up EBS - think it was a branch not the helpline - she asked what the variable base rate on her loan meant and the person told her -- that sound like a tracker alight and then explained the base rate was the ecb rate = so it would only make sense that the variable base rate was a TRACKER
_ I AM NOT MAKING THIS UP !!!
_ I AM NOT MAKING THIS UP !!!
This has always been my worry...that in the face of overwhelming evidence that the variable base rate is a tracker, EBS will simply inform the CBI that the cost of paying out redress to this cohort will be exorbitant and cripple EBS/AIB. CBI will then have to consider wider systemic/economic consequences of redress but hopefully they will back the consumer on this one.
Thanks haveaniceday - I saw that alright. You are right, you couldn't make it up. Gave them an earful, the kids said I was like something from Fr Ted on the phone!
B26354 thanks for the update, I wasn't sure what the deal was the with Variable Base Rate - it should actually be very easy to determine, the lack of clarity from AIB/EBS/CBI on the term suggests a woolly cover up.
TigerDebt, apologies if you've posted this before but what date is on that tracker form - because it uses the term standard variable rate and that would help clarify when SVR was used if EBS are still maintaining that VBR is another term for SVR that was in use in 2005 (a load of cobblers). Thank you.
B26354 thanks for the update, I wasn't sure what the deal was the with Variable Base Rate - it should actually be very easy to determine, the lack of clarity from AIB/EBS/CBI on the term suggests a woolly cover up.
TigerDebt, apologies if you've posted this before but what date is on that tracker form - because it uses the term standard variable rate and that would help clarify when SVR was used if EBS are still maintaining that VBR is another term for SVR that was in use in 2005 (a load of cobblers). Thank you.
Agree totally but theyre the ones that made a balls of it and if found impacted this cohort is just as entitled to redress as all others, going on Padraig Kissanes assertion that there could be 2,500 people involved thats serious money all right. The issue is how they recoup this money and as you say could the state have to come in again?
haveaniceday
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I think maybe I will call a few branches and ask people working there what a variable base rate is?
could be interesting - anyone I have talked to on the helpline sounds very young - the last person I spoke to kept saying 'oh that was before my time' like I am guessing these guys are like in a call centre setup?
Went i went back to sars/ebs after they told me they, after my second FOI, they had no more info - they sent me a letter saying we have no more info
so i asked them for a letter into which they needed to respond to each individual item I requested and tell me in writing they did not have it
I have yet to get the letter - that was about 3 weeks ago - I was promised It would be sent out very soon
Funny they have not done it as it would have looked mad - basically a letter listing out that they cannot provide me with any of the following details on my loan
= the terms of my loan
= the conditions of my loans
= preceding loan offers I was provided with as mine was an amended offer
= what the rate at drawn down was based on
could be interesting - anyone I have talked to on the helpline sounds very young - the last person I spoke to kept saying 'oh that was before my time' like I am guessing these guys are like in a call centre setup?
Went i went back to sars/ebs after they told me they, after my second FOI, they had no more info - they sent me a letter saying we have no more info
so i asked them for a letter into which they needed to respond to each individual item I requested and tell me in writing they did not have it
I have yet to get the letter - that was about 3 weeks ago - I was promised It would be sent out very soon
Funny they have not done it as it would have looked mad - basically a letter listing out that they cannot provide me with any of the following details on my loan
= the terms of my loan
= the conditions of my loans
= preceding loan offers I was provided with as mine was an amended offer
= what the rate at drawn down was based on
AIB/EBS and other banks have traditionally used the term base rate when referring to a central bank or ECB rate. I’ve attached an example here. As you can see AIB/EBS don’t use the term variable base rate or base rate when referring to a Standard Variable Rate but do when referring to changes to a tracker rate....
I’m really not sure how much more evidence is needed to demonstrate that at the very least this variable base rate term is profoundly ambiguous...and there’s a lot more documentation that hasn’t even been posted on here yet that proves the variable base rate is the ECB base rate plus margin.
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I have similar concerns.
haveaniceday
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HAs anyone been in contact with Paul Murphy - at the last finance committee meeting he seems to have been very good on ebs
https://www.oireachtas.ie/en/debate...diture_and_reform_and_taoiseach/2018-06-21/2/
if you scroll down to his questions he seems to have done a good job of making himself familiar and asking decent questions?
https://www.oireachtas.ie/en/debate...diture_and_reform_and_taoiseach/2018-06-21/2/
if you scroll down to his questions he seems to have done a good job of making himself familiar and asking decent questions?
The EBS loan offer refers to a “base rate” and subsequent EBS rate change documentation sent to customers on this rate refers to changes in the ECB rate (base rate). And on pre 2008 documentation there is no mention of an EBS base rate or SVR or the bank changing the rate at their own discretion as is the case for an SVR. Do they actually think people and the CBI are stupid?
haveaniceday
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Just wondering - i spoke to some one today who called ebs 'again' about her issues re not having been given a tracker when it was still available -
She was told last week her issue would be reviewed again in light of an item on her loan agreement she brought to their attention over the phone.
Rather than go ahead and do this, instead ( after a period of time) they sent her a letter asking her to send them in a copy of her loan agreement - again I a not making this up!!!!!
she called them up pretty aggravated and was told by the person on the phone that her tracker had already been reviewed twice by an independent 3rd party or parties ?
so i was told my mortgage had been reviewed and deemed not impacted - surely my foi - where i asked for all notes stored against my mortgage should have included the details of this independent 3rd party review?
She was told last week her issue would be reviewed again in light of an item on her loan agreement she brought to their attention over the phone.
Rather than go ahead and do this, instead ( after a period of time) they sent her a letter asking her to send them in a copy of her loan agreement - again I a not making this up!!!!!
she called them up pretty aggravated and was told by the person on the phone that her tracker had already been reviewed twice by an independent 3rd party or parties ?
so i was told my mortgage had been reviewed and deemed not impacted - surely my foi - where i asked for all notes stored against my mortgage should have included the details of this independent 3rd party review?
haveaniceday you raise a very interesting point regarding data provision. Would you consider ringing the Data Commissioner? I suspect this will be much the same for everyone so it would be interesting to see what the reaction would be if a few of us call in.
It would seem the EBS tracker helpline staff are being coached on what to say and what definition of the variable base rate to give to customers and they insist that the variable base rate is not linked to the ECB base rate.
EBS’ problem is that the CBI have confirmed that all tracker & SVR products followed ECB base rates up until mid 2008 (see CBI paper attached). The banks borrowed money on the Euribor market and this became problematic when the financial crisis hit & this is when SVR rates stopped following ECB base rate because the cost of funding for the bank to borrow via euribor (see a better Padraic Kissane online explanation attached!!).
We would have no argument if SVR was stated in the offer even if the SVR followed the ECB base rate as there would be no reference to an underlying “base rate” on said loan offer. The only “base rate” that the banks followed between 2003-2008 was the ECB base rate. There is no doubt about this. Now that has been established the margin can be calculated pretty easily on each variable base rate loan offer(an actual rate is provided on the loan offer e.g. 4.25%).
Furthermore, the variable base rate loan offers do not state that the bank can change the interest rate at their own discretion as is the case with SVR loan offers. The reason being is that these loans ARE directly linked to an underlying base rate with margin that banks can’t change on a whim.
EBS’ problem is that the CBI have confirmed that all tracker & SVR products followed ECB base rates up until mid 2008 (see CBI paper attached). The banks borrowed money on the Euribor market and this became problematic when the financial crisis hit & this is when SVR rates stopped following ECB base rate because the cost of funding for the bank to borrow via euribor (see a better Padraic Kissane online explanation attached!!).
We would have no argument if SVR was stated in the offer even if the SVR followed the ECB base rate as there would be no reference to an underlying “base rate” on said loan offer. The only “base rate” that the banks followed between 2003-2008 was the ECB base rate. There is no doubt about this. Now that has been established the margin can be calculated pretty easily on each variable base rate loan offer(an actual rate is provided on the loan offer e.g. 4.25%).
Furthermore, the variable base rate loan offers do not state that the bank can change the interest rate at their own discretion as is the case with SVR loan offers. The reason being is that these loans ARE directly linked to an underlying base rate with margin that banks can’t change on a whim.
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I received a final letter from haven stating I was deemed not impacted. I submitted complaint to financial ombudsmen who wrote to AIB. They stated that i was deemed not impacted 'to date'. If the account is subsequently found to be impacted we will inform the complainants in writing. It states in any case it will wrote again when tracker mortgage review is completed.
I thought the tracker mortgage review was to be completed by now but ombudsman letter states my complaint is on hold until conclusion of central bank assurance work.
Again my loan offer stated that i was on fixed rate for 3 years from July 2008 then to move to variable base (currently 5.34%) which I contend was a reference to tracker variable at the time
I thought the tracker mortgage review was to be completed by now but ombudsman letter states my complaint is on hold until conclusion of central bank assurance work.
Again my loan offer stated that i was on fixed rate for 3 years from July 2008 then to move to variable base (currently 5.34%) which I contend was a reference to tracker variable at the time
To B26354,
I write to ask you for permission to quote what you said in a piece you wrote on this thread on 7/2 last in relation to the nearness in drawdown dates for youre mortgage and my partners, eg May 2007 and Aug 2007 and the change in ECB rate in between the 2 drawdowns. The reason im asking this is i have been advised by a financial advisor i spoke with last week to write a letter to EBS asking them a number of questions regarding why my partner wasnt put on a tracker mortgage as she felt she was entitled to one based on the fact that the VBR intwrest rate basis exactly followed the ECB rate at +1.25% and she was entitled to assume that she was in fact on a tracker mortgage. Youre experience is very important as it shows this was the case. He told us we need to muddy the waters as much as possible which is why im hoping to include this as a reason for a tracker rate. He also told me based on the reply she gets to take it to Padraig Kissane as he hasnt had dealings with EBS and PK might possibly recommend going to the FSO with a breach of contract case if he was to give an opinion that it isnt a redress case. Thanks in advance for youre help in this, regards,
Tonymac
I write to ask you for permission to quote what you said in a piece you wrote on this thread on 7/2 last in relation to the nearness in drawdown dates for youre mortgage and my partners, eg May 2007 and Aug 2007 and the change in ECB rate in between the 2 drawdowns. The reason im asking this is i have been advised by a financial advisor i spoke with last week to write a letter to EBS asking them a number of questions regarding why my partner wasnt put on a tracker mortgage as she felt she was entitled to one based on the fact that the VBR intwrest rate basis exactly followed the ECB rate at +1.25% and she was entitled to assume that she was in fact on a tracker mortgage. Youre experience is very important as it shows this was the case. He told us we need to muddy the waters as much as possible which is why im hoping to include this as a reason for a tracker rate. He also told me based on the reply she gets to take it to Padraig Kissane as he hasnt had dealings with EBS and PK might possibly recommend going to the FSO with a breach of contract case if he was to give an opinion that it isnt a redress case. Thanks in advance for youre help in this, regards,
Tonymac
Tonymac-yes I have no problem you quoting it.
For what it’s worth I don’t think any of the variable base rate cases will go to the FSO until the central bank have signed off on that particular issue. They haven’t done that yet as my account is still in review with no sign of a final response yet.
PK really is the person to go to for advice on this. You will likely be redressed once a test case gets the green light from EBS & they finally admit that the variable base is a tracker; or that there is so much ambiguity around the term that EBS eventually fold under the pressure from the CBI.
I’ve attached the official EBS rates from different time periods during 2007 as this might help your “ambiguity” argument. Remember that the “tracker rate” is defined as a “variable” rate on loan offers just to muddy the waters further!
For what it’s worth I don’t think any of the variable base rate cases will go to the FSO until the central bank have signed off on that particular issue. They haven’t done that yet as my account is still in review with no sign of a final response yet.
PK really is the person to go to for advice on this. You will likely be redressed once a test case gets the green light from EBS & they finally admit that the variable base is a tracker; or that there is so much ambiguity around the term that EBS eventually fold under the pressure from the CBI.
I’ve attached the official EBS rates from different time periods during 2007 as this might help your “ambiguity” argument. Remember that the “tracker rate” is defined as a “variable” rate on loan offers just to muddy the waters further!
