After some digging by the Financial Regulator he found that not all lenders have been clear and upfront with their customers about the consequences and possible costs of switching from a Tracker to a variable or fixed rate mortgage.
As a result, the regulator has told lenders that they must show customers the difference in monthly repayments between the tracker rate and other mortgages rates, and the advantages and disadvantages of the various rates being offered. Not only that but banks have also been told that they need to warn and notify their customers clearly that they may not be able to switch back to their Tracker mortgage when being offered other rates.
Follow this, the regulator also said that he is… considering introducing a “cooling off” period to allow customers who have switched to change their mind and return to their old rate.
Mortgage broker Frank Conway, director of the Irish Mortgage Corporation, warned tracker-rate borrowers that they should be wary of moving to other rates. “We are saying: ‘Mind your tracker and only move off it when it is beneficial to you’.”