Early in 2006 I was accepted by KBC bank for a mortgage. I was a first-time buyer, and knew nothing about banking, mortgages etc.
I started off with a three-year interest-only payment . On completion of that term I was then offered a one-, two- or three-year fixed rate or a variable rate. The mortgage continued from there on. In 2016 I finally was able to pay the mortgage off in full.
My friend at the same time also was a first-time buyer, and with a different financial body was offered a tracker mortgage? She today is still on the same tracker mortgage.
I felt at that time I had been unfairly led, and poor or no advice was given at the time in question. My question today is: was I entitled to a tracker mortgage at that time, and if so why was it not offered ?
Ms C.G., email
When it comes to mortgages – or any contract on borrowings (or savings) with a bank – what you are entitled to depends entirely on the wording of the contract.
I know you say that you have now paid off this mortgage in full, but if you are to check whether the bank has a case to answer I hope you have kept a copy of the mortgage contract you signed back in 2006.
KBC, or IIB Homeloans as it was called back then, did advertise a promise in late 2006 that its “standard practice” was to transfer everyone on a fixed rate to a tracker mortgage at the end of the fixed term as a default. Unless you actively chose a different path this is what they said they would do.
It is worth remembering, of course, that this was only an advertising campaign. And while these are supposed to be accurate, you’d want to see the contract wording to be certain.
In any case, back in 2006 you were not on a fixed rate: you were on an interest-only rate. And while the same array of options would most likely have been available to you on expiry of the term, it does not automatically follow.
I would be surprised if the 2006 contract did not state specifically what your choices would be when the interest-only period came to a close in 2009; it would be standard practice. Check that contract.
Identical options
Certainly while your friend’s experience might indicate what the general banking practice was at the time, it does not necessarily follow that your situation would have attracted identical options.
Where are we if you no longer have the contract? In a much weaker position.
You can always approach the bank for a copy of the contract. It may have it, but that depends on their data-protection management. I’m not sure how long banks would retain such paperwork after a contract ends – in your case in 2016 when you paid off the last of the mortgage.
If you are in doubt you can certainly submit a query to the bank asking why you were not offered a tracker mortgage in 2009 or subsequently. And if they cannot answer to your satisfaction you can pursue the claim as part of the tracker mortgage complaints process. The bank has a page on its website outlining how you can go about this. You can find it here - https://iti.ms/2F9fuKB
The bank will have to unearth a copy of what conditions would generally attach to interest-only mortgages issued at that time.
Obligations
On a final word of advice, never ever agree a financial contract unless you feel you are clear on all its terms, language, options and obligations. You say you felt you got little or no advice back in 2009. That’s quite possibly true, but you should have kept at them until they made the position clear – if necessary bringing a friend or intermediary with you to meetings to help.
If you don’t understand it, don’t sign: and if someone is applying the hard sell and putting you under pressure, saying you must sign now or these terms will no longer be available, certainly don’t sign unless you are fully comfortable with what you are agreeing to.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice
