More than 1,000 Irish mortgage holders whose loans are serviced by Mars Capital will have their interest rates increased in the new year. In a statement published on its website, Mars said the changes would affect a combined total of 1,175 accounts out of the roughly 70,000 accounts it services.
The affected mortgage loans are held through an entity called Shamrock Residential 2022-1 DAC, of which Mars services 51.2 per cent of the mortgages. The whole loan book is made up of mortgages that were originally issued by several Irish banks, including Ulster Bank, First National, Danske Bank and AIB, and in January of this year the total value of the portfolio was just over €460 million.
In the statement Mars said that it was increasing the interest rate for the more than 1,000 mortgage holders in part because it had in error applied a lower rate of interest to some of the customers. It said it had “identified an error which resulted in interest rate changes on 382 customers’ European Central Bank (ECB) tracker loans not being applied to those ECB tracker loans since November 2022″.
Mars said that it would correct the error and apply the correct interest rate in the future, which would lead to a higher interest rate for those customers.
It added that “Mars Capital will not be seeking to recoup any of the interest which was not charged during the period of the error from ECB tracker loan customers, and the corrected interest rate will only apply on a going forward basis”.
The statement said that a further 793 variable rate customers would also see their interest rates increase, noting that it “has not increased the variable rates consistently to 793 customers that had entered into specific types of low fixed rate or positive equity arrangements with a former owner of their loans”.
The statement said that following ECB rate increases and decreases over the years Mars “now intends to transition these customers to the current applicable variable rate to bring the rates applicable to these customers in line with the rates of similar customers on going forward”.
The new, higher rates would apply from November 2024, but the company said that “no customer will be asked to make a payment in respect of the revised interest rate until January 2025″. It said it intended to write to all impacted customers in the next few days to notify them of the changes to their interest rates.
Customers who are affected by change can make a complaint in writing to Mars, and the firm will have to issue a decision in writing within 40 days. Any customers not satisfied by that decision can take the matter to the Financial Services and Pensions Ombudsman.
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