A last-minute letter from a bank brought Christmas joy to one Dublin family on Thursday, with news that they have won a long battle over their mortgage rate.
Caitríona Redmond from Balbriggan lost her job during the early stages of the recession and had exited a mortgage arrears resolution process (MARP) with Ulster Bank earlier this year.
She and her husband John are among about 15,000 people affected by the ongoing tracker mortgage dispute after they were incorrectly denied access to such a product by their lender.
The cost of their fixed rate mortgage since 2010 swallowed almost 50 per cent of their household income, forcing them to rely on family income supplement.
Ms Redmond, an author and freelance writer, said the family was living “far below” the minimum spending guidelines for five people.
“We needed to pay the debt, so we really put ourselves through an awful lot, and it turns out that maybe that was unnecessary. It’s not even holidays or breaks, it’s that we had to learn how to grow our own food, my husband had to learn how to service the car; we went that ‘micro’ in terms of managing our finances.”
The family learned to be more energy efficient and Ms Redmond kept the grocery bills down to a minimum.
She budgeted €80 a week for food for five people – two adults, a 17-year-old teenager and children aged eight and five.
“We’ve been writing to Ulster Bank since the spring. We were aware that under the tracker mortgage investigation we’d be entitled to our tracker back,” Ms Redmond said.
Speaking to the Today with Sean O'Rourke programme on RTÉ Radio 1 on Thursday, she revealed a letter had just arrived from the bank to inform them that they were being reinstated onto the tracker rate.
"It runs to tens of thousands straight away, which makes a difference of around €300 a month to us, before any capital adjustment. It will reduce the amount we owe to the bank significantly and that will adjust our repayment amount down again," Ms Redmond told The Irish Times.
“We receive family income supplement – we are a low income family. Up until today, the mortgage was very close to 50 per cent of our household income. Once they make the capital adjustments and allow for the lower interest rate, it goes back down to under 25 per cent. That’s how much of a difference it’s going to make to us.”
There will be immediate demands on the extra funds, however.
“There’s a car that we’re probably going to have to replace. We’ve a 17-year-old who’s doing her Leaving Cert this year and she wants to go to college. But to know that there’s a buffer there, that there’s security there … I can’t describe it,” Ms Redmond said.
“The relief is in knowing that it’s going to be sorted. They are now saying they will write to us in March to give us a timeframe for compensation and redress. So we don’t even know, come March 2017, whether this will all be finished. I suppose it’s like a pause or a rest on the road that we’re on.”
Asked whether she would now be able to loosen the purse strings for Christmas, she said: “We were always going to have a great Christmas and it’s not about letting the purse strings loose, it’s the relief in knowing that it will be sorted – that’s most important to us.”
“I can’t describe how it feels, the weight that has lifted. Not only is it financially life changing, we have been proved right, and we know six years on that certainly quite an amount of the financial hardship we’ve gone through was needless.
“For us, it’s mostly the emotional impact right now that we’re concerned about. It’s the relief in knowing that no matter what happens in the future, this mortgage is so much more affordable, and the relief that it’s unlikely we will be in such dire straits again.”
The mortgage, taken out in 2003, still has 15 years to run.