Your MoneyQ&A

Leaving it late to raise concern about AIB not offering a tracker mortgage

Homeowner wants to know if paying off their mortgage at this stage will lock them out of any chance of a refund or compensation

DO NOT USE THIS PHOTOGRAPH.. Legal request.
Pedestrians pass a sign offering mortgage deals on display outside an AIB branch: homeowner says she was never offered the option of a tracker mortgage. Photographer: Aidan Crawley/Bloomberg
Dominic Coyle's picture
Dominic Coyle
Tue Feb 11 2025 - 05:00

We have our home mortgage with AIB, taken out in August 2003 at 3.3 per cent. We fixed our rate later that month for five years at 3.99 per cent.

In August 2008, the rate changed from fixed to variable (rate 5.5 per cent). The variable rate changed on October 22nd to 5 per cent.

We were never offered the option of a tracker rate when our fixed rate expired in August 2008. AIB withdrew its tracker mortgage option in October and we were never informed of a tracker option before or after October 2008.

We did not complain to the AIB in writing at the time. We thought if we were aggrieved and treated unfairly that the AIB would have identified our account and contacted us when it was apparent they had to legally rectify the breaches.

READ MORE

Padraic Kissane was on the radio recently discussing the outcome of the Central Bank report from 2022 regarding the extensive fines for regulatory breaches. This prompted me to contact the Central Bank and AIB for a response, this may take some time.

Can you comment if we have a right to complain and can we expect redress from AIB at this late stage?

We are in a lucky position that we have asked for a redemption value to repay the remaining balance of our mortgage. If we proceed with this, would it invalidate any opportunity for redress with AIB?

Ms P.F.

As we entered 2025, I have to say the one topic I no longer expected to get queries on was the tracker mortgage scandal. It is 13 years since the scandal first raised its head in the courts and a decade later this year that the Central Bank announced what it later described as “the largest and most complex consume protection review we have ever undertaken”.

That review lasted four years, with a “final report” in 2019. Enforcement action against the banks continued into 2022 and a prosecution was concluded only earlier this year.

As of 2019, more than 41,000 homeowners had been affected, of whom almost 100 lost their family homes and more than 320 lost a property. The banks have been forced to pay about €900 million in compensation and refunds and, between them, have been fined a further €278 million.

But even now, as I understand it, more cases remain before the Financial Services and Pensions Ombudsman and a trickle continue to be reported to the Central Bank... including, presumably, yours.

As you do appear to have been aware of the situation more or less throughout, I’m really at a loss to understand why you did not at least contact the bank, the ombudsman or the Central Bank at some point if only to make sure your case was on the radar.

Trusting AIB, or any bank, to “do the right thing” when all the evidence showed they had been doing anything but seems trusting in the extreme. For sure, they were supposed to do a full audit of their books and make contact in any cases that arose but the incentive for them was always to keep the focus of investigation as narrow as possible.

Having heard nothing in all those years, it appears that only the imminent redemption of your mortgage and a chance hearing of tracker mortgage campaigner Padraic Kissane on the radio has spurred you to action. I’m as close to speechless as I get.

The good news is that it is not too late to act. The banks have not been given the reassurance of any end date beyond which they do not need to entertain claims.

As you are now in the fortunate position of being able to pay down the balance of the mortgage, the other good news is that paying off the loan in full will not disqualify you from pursuing your inquiries/action.

Ulster Bank has been sending letters to tens of thousands of customers recently letting them know they are due money back on miscalculated mortgage payments – even though most of those customers no longer have those mortgages or are even Ulster Bank customers any more, given the bank’s winding down of its Irish operations.

You will have to look at the terms of your initial mortgage loan back in 2003 and, more importantly the Ts&Cs of the five-year fixed loan you took out later that year.

It would be normal that you would be able to avail of any of the bank’s mortgage offerings when that fix concluded. As that was in August 2008, two months before AIB pulled its tracker product, I would expect the tracker option should have been among those offered to you. You’ll need to check your paperwork from back then to be sure.

Certainly, by October 22nd, when you were notified of the change to a variable rate, the tracker option was no longer available.

If you should have been offered a tracker rate and were not, you will be entitled to a refund and compensation. Certainly from October 2008 to July 2022 a tracker mortgage would have been by a distance the better option.

So redeem the mortgage if it suits but persevere with your enquiries of AIB and the Central Bank, and keep all the relevant paperwork.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com with a contact phone number. This column is a reader service and is not intended to replace professional advice

READ NEXT