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Law Column: I was moved off my original tracker mortgage

Q:

My husband and I were on a tracker mortgage and moved to a fixed rate for a planned period of three years. We were assured this fixed rate period would give us stability over our repayments in a period of financial hardship. 

When the three-year fixed rate period had passed we expected to resume repaying the original tracker mortgage rate. What actually transpired was the bank put us back on a tracker mortgage but on a higher rate than the original tracker rate we had previously agreed to. 

We are struggling to make repayments and fear our home will be repossessed. We are concerned we have been duped by the bank into repaying more than was initially agreed to - was this legal?

A:

I am sorry to hear of your difficulties and concerns relating to your mortgage.

Repaying a mortgage can be stressful enough without the added uncertainty surrounding tracker mortgages which are featuring in the media in recent weeks.

As part of the Central Bank's Examination of Tracker Mortgages that is currently underway your bank should identify you as a customer who was sold a tracker mortgage and inform you that your mortgage will be the subject of a full review.

Your bank should immediately stop charging you the incorrect tracker rate if the wrong interest rate was applied and stop any adverse consequences (e.g. home repossession) as soon as possible. Your bank should conduct a full review of your mortgage, examining the terms and conditions of the mortgage agreement entered into between you and your bank, as well as examining its communications with you in relation to the mortgage. 

Following a full review, your bank should inform you of the precise nature of any error and the correct tracker rate that should be applied. Where the correct tracker rate had not been applied to your mortgage in accordance with your banks’ contractual or regulatory requirements you should be provided with redress and compensation. 

If you were wrongfully placed on an incorrect tracker rate you would be entitled to redress in the form of (1) your bank rectifying your tracker interest rate i.e. bringing you back to the original tracker rate that was previously agreed to and (2) your bank refunding you the amount of money you overpaid by. 

Thereafter you would be entitled to compensation to return you to the position you would have been in had the correct tracker rate been applied. This compensation should reflect the fact that the amount of money you overpaid by was money that the bank wrongly took from you and money that you would otherwise have had access to. The compensation should also reflect the stress, suffering and financial damage this has caused to you, your husband and family. 

In light of the profound breach of trust by your bank you may feel that your Solicitor would be best placed to advise you on whether the redress and compensation being offered by the bank is sufficient to compensate you for your loss, damage, suffering and distress as well as inconvenience.

*Rachel Finn is an Apprentice Solicitor in Cantillons Solicitors of 38/39 South Mall, Cork an award winning law firm practising in all areas of litigation. Since the firm was founded in 1980, they have been involved in precedent making cases, amongst them Best V. Wellcome, Louise O’ Keeffe v. Ireland and most recently Costello V. HSE, a medical negligence claim in which they achieved damages of €17.8 million, the highest ever award in Irish personal injury litigation to date.

Cantillons Solicitors received the award of Munster Law Firm of the Year (Over 5 Solicitors) at the AIB Irish Law Awards 2016.

*This weekly column is a readers’ service and is not intended to replace professional advice.

No individual correspondence will be entered into. Email your queries to legalqueries@cantillons.com