INVESTORS who have buy-to-let tracker mortgages with Permanent TSB are seeking an order in the High Court on Friday that would stop the bank forcing them to pay higher interest and also to start paying back capital.
Thousands of people took out tracker mortgages to buy investment properties during the boom. They were on a low margin above the European Central Bank rate, and interest only for the term.
A bullet payment was to be made at the end of the mortgage term.
But the bank had been contacting the buy-to-let investors telling them to pay back capital and interest every month. If they were unable to also make capital payments the bank told them they would be put on to a higher variable rate.
It later changed this to tell them they could keep their trackers if they could not make the capital repayments but at a margin that was 1pc higher than their existing tracker deal.
Now the Irish Independent has learned that Dublin-based solicitor Walter Odlum has a case in the High Court on Friday when senior counsel Ross Maguire will argue that a statutory notice on the loan agreement says the interest-only deal is for the entire term.
Mr Odlum has a group of 110 buy-to-let investors calling themselves Protect Our Trackers backing his legal challenge.
The bank issued 18,000 buy-to-let mortgages to 14,000 investors. A quarter of the mortgages are three months or more in arrears.
But the bank's senior counsel, Paul Gallagher, is set to argue that a special condition in the letter of loan offer clearly states that the mortgages can be reviewed after either three or five years and the interest-only aspect of the deal can be altered.
The bank stopped writing to its investor mortgage holders last July, seeking to get them to pay capital and interest. But it is set to vigorously oppose the legal challenge.
Moving from paying interest only to paying interest and capital could mean monthly repayments tripling for investors.
It is understood large numbers of investors are struggling to even meet the current interest-only payments.