Thursday, 6 December 2007

Are Tracker Mortgages dying out?

Permanent TSB today announced that they are withdrawing Tracker Mortgage guarantees in the New Year. For those who don't know, a Tracker Mortgage is one which is at a variable rate, but the margin over the European Central Bank (ECB) rate is fixed for the life of the loan. Permanent TSB's news now means that they are only guaranteeing the margin for one year. Effectively this is no longer a Tracker Mortgage in the commonly accepted sense.

The stated reason is the cost of funds. I wonder if other lenders will follow suit. If you've been considering switching to an attractive tracker mortgage deal, maybe now is the time.


Helen Grogan said...

I came accross this item about PTSB's trackers while trying to find out if anyone else has been stung by them like I have. I took out a tracker with them in Fen 2008 that I believed was an 0.8% discounted to 0.6% for 1 year, reverting to 0.8% afterthat. I did query the small print which was only available on the day I was due to sign with the solicitor but was reassured that the "the rates are competitive !!!" and I unfortunately signed. I believe they mis-sold, mis advised and misadvertised what was in fact a 1 year tracker, not a discounted tracker. I am going to the financial ombudsman to complain as they will do nothing. Have you heardd ogf any other complaints? Thanks
Helen Grogan

Liam D. Ferguson said...

I haven't heard of similar complaints to PTSB.

If making a complaint, do you have any documentation (even e-mails) suggesting that the rate would be 0.8% after one year? That would certainly help.

Do you have a copy of your original loan offer? Even if not, your solicitor or Permanent TSB should be able to send you a copy, which will clarify what the terms were.

Even if not, the fact that the mortgage was marketed as a tracker might itself give you grounds for complaint. A "tracker mortgage" by the common definition is one which tracks the base rate for the life of the loan. So yours isn't really a tracker at all.

If approaching the Financial Ombudsman, remember to get a final response from Permanent TSB in writing first, as the Ombudsman cannot assess a complaint until you do.

Good luck with it. Please let me know how you get on.

Regards, Liam

Helen Grogan said...

Hi Again,
The financial ombudsman did not find in my favour so I am going to appeal. I don't hold out much hope but I want to cause PTSB as much inconvenience as possible! In the meantime having selected PTSB's variable rate as the cheaper option compared to the offered follow-on tracker tracker (ECB +2.25), the variable rate is now dearer than that tracker! I asked if they would offer me that tracker again in the light of my complaint against them being unsuccessful but they said no. I have been looking for cheaper mortgages but find with age (50) and reduced salary (now on a 4 day week to help look after an aged parent, plus all the extra deductions due to various budgets) I can't afford the best offer as they wont let the mortgage run after I'm 65, and the second best wont accept me if my existing mortgage is less than 2 years old. PTSB did me no favours at all and cheated me of a decent mortgage rate. will let you know how the appeal goes.