Tuesday 16 January 2018

Homeowners complain they were cheated out of trackers

Charlie Weston Personal Finance Editor

HOMEOWNERS have made a raft of complaints to the financial ombudsman claiming they were cheated out of valuable tracker rate mortgages.

Tracker mortgages are hugely valuable as the interest rate on these homeloans can only rise when the European Central Bank raises rates.

And the ECB has not hiked its main rate for 18 months now, leaving those with trackers paying the lowest mortgage rates in the market.

Some people have tracker rates set as low as 1pc above the ECB rate, meaning they are paying just 2pc. This has meant those with trackers have been typically paying around €200 less a month in repayments than those with variable rates.

But it emerged yesterday that many of those who opted to fix their mortgage rate for a period ended up losing their valuable tracker once the fixed period was up.

Financial services ombudsman Bill Prasifka said yesterday his office had received a surge of mortgage-related complaints.

More than a third of the complaints made about banks in the first half of this year related to mortgages, Mr Prasifka said.

"The complaints, in general, relate to the changing from a tracker mortgage to another rate, be it a fixed or variable rate," he said.

Consumers have questioned the information given to them by their lender when they opted out of their trackers. They complained that they were told verbally they would be able to get back to a tracker once the fixed period was up.

Mr Prasifka said his office was dealing with 40 complaints at the moment on the loss of good value trackers.

The ombudsman pointed out that some of those who complained were entitled to revert back to a tracker, but in many of the cases the mortgage holder has no entitlement under their contract to revert to a tracker once they have finished a fixed-rate deal.


He said some of the issues raised had been referred to the Central Bank, but stressed that people should read the small print in their contracts so that they are clear what they have signed up for.

The ombudsman, who resolves complaints between consumers and financial providers, dealt with 133 complaints about mortgages in the first six months of this year.

There was also a rise in complaints from people who have just retired or are about to and their pension fund has been wiped out by the collapse in global investment markets.

These people argued that their pension money should have been moved into a safer cash fund within two years of their retirement.

But Mr Prasifka said investment firms were not allowed to switch funds around without written permission from the pension fund holder.

A total of 3,600 complaints were received in the first six months of the year, roughly the same number as in the first half of 2009.

Irish Independent

Promoted Links

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Also in Business