Sunday 28 May 2017

Mortgage gripes are up by 40pc, says watchdog

Someone with a tracker and a €300,000 mortgage is typically paying €500 less a month than another mortgage holder with the same sized loan but on a variable rate. Photo: Thinkstock
Someone with a tracker and a €300,000 mortgage is typically paying €500 less a month than another mortgage holder with the same sized loan but on a variable rate. Photo: Thinkstock

Charlie Weston Personal Finance Editor

THERE has been a 40pc surge in complaints about mortgages, with trackers the main focus of discontent, an official report shows.

The latest report from the Financial Services Ombudsman shows homeowners are turning to him in record numbers after losing their trackers.

Some 400,000 people have trackers, which are low priced compared with other mortgages. Someone with a tracker and a €300,000 mortgage is typically paying €500 less a month than another mortgage holder with the same sized loan but on a variable rate.

Yesterday, ombudsman Bill Prasifka revealed that he had got 348 complaints about mortgages in the past six months, a rise of 40pc.

Many of those complaining alleged that their lender would not allow them to go back to a tracker at the end of a fixed rate.

Some mortgage contracts allow people who have a tracker to opt for a fixed rate and then go back to the tracker at the end of the fixed period.

Mr Prasifka's report for the second half of last year shows that six out of 10 mortgage complaints are being rejected.

He explained that some people claimed they should be on a tracker rate even though they never had one, with others claiming they applied for one but the product was removed by the time their application was received by the lender.

Contract

"It is a matter of contract," is all Mr Prasifka would say when asked if some people were trying it on when complaining that they should have a tracker even though they never had one.

Trackers were withdrawn in 2008.

The Central Bank has told all lenders that they must clearly show any customer coming off a tracker the financial impact that decision will have, Mr Prasifka said.

It was hardly surprising there was a surge in complaints about mortgages given the fact that eight out of 10 mortgage holders were struggling to meet repayments, the ombudsman said. "This confirms that more and more people are in distress and arrears and in negative equity," he added. Mr Prasifka warned financial firms that they needed to make greater efforts to resolve complaints before consumers complained to the ombudsman office.

A total of 3,599 complaints were received by the ombudsman in the last six months of last year, little changed from the first half of 2010.

But in the first three months of this year there has been a sharp rise in complaints, with a record 768 received in March alone.

Large numbers of complaints were insurance related, following the big freeze at the turn of the year.

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