Wednesday 22 November 2017

PTSB tracker rate payouts could reach €30,000 each

Charlie Weston

Charlie Weston

HOMEOWNERS who are having tracker mortgages restored by Permanent TSB could be entitled to windfalls of up to €30,000 each, experts said.

And the bank is being urged to pay out lump sums rather than taking the amount to be refunded off the mortgages.

Permanent TSB is likely to have to put up to 2,000 of its customers on to trackers and refund them for having to pay much higher variable rates over the last six years.

The bank withdrew a Supreme Court appeal to a High Court finding that the financial services ombudsman was right to decide that two couples were entitled to cheap tracker rates.

The difference in cost between a tracker rate and variable rate could be anything between €5,000 and €7,000 a year.

Other banks are now set to come under pressure to give their customers trackers and refund them.

Dublin-based financial adviser Padraic Kissane, who has taken cases on behalf of consumers to get trackers restored, said the refunds could be large for each of the Permanent TSB customers affected.

He said someone on a variable rate, instead of a tracker, would end up paying at least €400 extra a month more. Over six years this would amount to close to €29,000.

Mr Kissane called on the bank to pay people lump sums. It would be cheaper for the bank to reduce the overall amount of the mortgage by the amount to be refunded.

But in many cases people need the money to pay off much more expensive debt, which would be a better use of the funds for them.

And he called for the bank to pay compensation, as well as putting the customers on trackers and refunded them for the higher charges.

The 2,000 mortgage holders affected opted to take out fixed rates in 2008 and 2009 when the European Central Bank (ECB) interest rate was on the rise.

They were told they could move to a tracker rate at the end of the term of the fixed rate.

But the bank refused to put them on cheap tracker rates.

Irish Independent

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