Home owners to fight bank on trackers

PERMANENT TSB customers are to challenge the bank’s attempts to force them off their buy-to-let tracker mortgages in a move that will be keenly observed by mortgage holders.

News of the legal challenge came as Taoiseach Enda Kenny signalled that the Government would consider ways to ease pressure on struggling mortgage holders.

The Protect Our Trackers group claim the decision to end the interest-only period on buy-to-let tracker mortgages will see some monthly repayments jump from €525 to €1,600. The group also claims the move is in breach of the mortgage contract between the bank and holders of buy-to-let tracker loans.

More than 18,000 Permanent TSB customers hold buy-to-let tracker mortgages worth €5 billion. Financial experts estimate such loss-making loans cost the bank €150 million per annum.

Since November, Permanent TSB has told such customers they must begin to make interest and capital repayments on their mortgages or they will lose their tracker as a way of moving them away from loss-making tracker mortgages.

Customers have been told they will only be given an interest-only option at a higher variable rate.

It is estimated any customer switching to the “preferential” variable rate would pay more than €3,000 extra annually above current repayment amounts. The campaign is being overseen by solicitor Walter Odlum, who wrote to PTSB asking it to reinstate the term-of- loan agreements.

Mr Odlum said buy-to-let investors with PTSB understood the interest-only repayments were to last for the loan duration.

He claimed the group had received advice from a leading senior counsel that the bank’s decision to terminate the interest-only period may constitute a breach of their agreement with customers.

The group is asking supporters to contribute €750 plus VAT towards the cost of a High Court action.

A bank spokesperson stressed it was only seeking to move its buy-to-let mortgage holders away from interest-only repayments, not customers whose mortgage is for their main home.

Meanwhile, Mr Kenny signalled the Government would consider “options to relieve stress on mortgage holders.”

Speaking in the Dáil, he said: “Such options must be treated carefully, would require authorisation and, in some case, legislation.”

AIB raised the possibility of debt forgiveness for some of its mortgage holders earlier this week, although no formal proposals are yet on the table.