Did three-month fix cost me access to a tracker mortgage?

Q&A: Three-month fixed-rate option raises questions about advice received

In 2006, banks had still not woken to the looming disaster that was tracker mortgages: it was only in 2008 that they started withdrawing them.

In 2006, banks had still not woken to the looming disaster that was tracker mortgages: it was only in 2008 that they started withdrawing them.

 

I took out my mortgage in December 2006. I had the choice of tracker, fixed or variable. I choose fixed. I was then put straight on to a variable rate when the fixed term finished in March 2007. I got a top-up which was put on a tracker. Should I have been given the option of a tracker for the first part of the mortgage when the fixed term ended?

Ms M.C., email

You took a three-month fix? That sounds odd. Strange as it seems in the context of the past decade, back in 2006 the trend in interest rates was upwards. The European Central Bank actually increased rates by a quarter point five times that year, bringing it to 3.5 per cent in December when you took out your loan. So fixing was not necessarily a bad decision, especially for hard-pressed first-time buyers.

Having said that, taking a three-month fix at any stage is next to useless, which raises questions about the advice you received at the time.

Anyway, leaving that aside, whether you should have been offered a tracker option at the end of the fix period is down to the wording of the mortgage contract you signed.

My instinct is that, in 2006, banks had still not woken to the looming disaster that was trackers: it was only really in 2008 that they started withdrawing them. On that basis, I would assume you did have the option, but you do need to check that contract.

If you did have an entitlement to a tracker, or are unsure because you cannot find the paperwork, you should contact your bank formally, in writing, to ask why you were not offered a tracker. Let them produce the documentation backing their position.

It is possible that you are entitled to compensation under the current tracker review but, on the basis of the very limited information you provide, I cannot say with any degree of certainty.

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

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