Lender Won’t Let Me Revert To A Tracker

Personal Finance: Your Queries Answered Q: I split my mortgage in June 2006 with roughly half at a fixed-rate at 4.59 per cent for four years and the rest in a tracker of 1.1 per cent. The account number for the tracker was the original account number

At the time I was led to believe that the fixed-rate part would return into the tracker mortgage at the end of the four years but I have nothing in writing from the bank. When I consulted ICS to confirm my understanding, they sent me a letter that this would not be happening as I had broken the terms of the mortgage agreement but they never told me what terms I’m alleged to have broken. Is there any possibility of me having all my mortgage in the tracker mortgage come May?– Ms LS (email)

A: I doubt it. What you have in writing are copies of the two mortgage contracts you will have signed in 2006 when you split the mortgage. The one relating to the fixed-rate element will state what your options are when that rate ends. Unless it offers the right to return to a tracker, you will not have such a right. As a recent correspondent found with Permanent TSB, even if you have a right to return to a tracker, you almost certainly will find such a tracker is priced out of the equation. In the current climate where banks are losing money on trackers and financial institutions are aggressively pushing fixed-rate products ahead of expected ECB increases in interest rates in 2010, it is very important that people considering moving from a tracker are clear on their options when that rate ends.

Can I raffle my house?

Q: Can I, as a private person, raffle a house? I moved job in 2007 and purchased my new house on interest-only. At the time I did this I also had my other house on interest-only as I had to buy out my ex-partner in 2004. Now I have a total of €615,000 on interest-only for four years (until April 2012). At this point I will have to pay the full mortgage on both houses. If I could raffle the house I don’t reside in it would go a long way towards solving my financial problems.  – D L, DUBLIN

A: You will not be allowed to raffle your home. Raffles in Ireland are governed by the Gaming and Lotteries Act 1956.

The general guidance, under Sections 27 and 28, is that such events can only be held for charity and no profit can go to the person organising it (you). So it would appear there is little prospect of you being allowed to organise a raffle for one of your homes. In any case, a permit would have to be issued by a local Garda superintendent. I’m not sure why you would want to organise a house sale in this way as you could find it difficult to get anything close even to the current value of the property.

I suggest you sell the home you don’t occupy – the one bought in 2004 – in which you may have some equity. You have some chance of recovering close to your purchase price of that property, but you will face a capital gains tax charge in relation to the time you have held two homes.

-This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering questions. All suitable queries will be answered through the column. No personal correspondence will be entered into.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2. E-mail: dcoyle@ irishtimes.com