In the coming new year, over 1,000 Irish mortgagees whose loans are managed by Mars Capital will see a rise in their interest rates. As stated on its website, Mars disclosed that the alterations will impact a cumulative 1,175 accounts from the approximate 70,000 accounts they service.
The mortgages that will be affected reside in an establishment called Shamrock Residential 2022-1 DAC, 51.2 per cent of these are serviced by Mars. The entirety of the loan book consists of mortgages initially granted by a number of Irish banks, such as Ulster Bank, First National, Danske Bank, and AIB. This January, the accumulated value of this loan portfolio amounted to slightly more than €460 million.
Mars acknowledged in its statement that the interest rate surge for the 1,000 plus mortgage holders is partially prompted by an error in applying a diminished interest rate to some clients. An identified mistake led to the discrepancy in interest rate changes on 382 customers’ European Central Bank (ECB) tracker mortgages, which have not been applied since November 2022.
The company clarified that the error will be rectified, and the accurate interest rate will be levied in the future, thus leading to heightened interest rates for these clients. It further emphasised that “Mars Capital has no intentions of gaining back any unpaid interest during the error period from ECB tracker loan clients, and the rectified interest rate will be applied prospectively”.
The statement further elaborated that an additional 793 changeable rate clients will witness a surge in their interest rates, having not consistently increased the variable rates to 793 clients who had entered specific low fixed rate or positive equity agreements with a previous loan owner.
In synch with ECB’s rate fluctuations over time, Mars “now has plans to transition these clients to the prevalent variable rate in order to harmonise the rates applicable to these clients with those of similar clients in the future”.
The revised, enhanced rates will come into force from November 2024. However, Mars has assured that “no client will be required to remit a payment concerning the revised interest rate prior to January 2025”. The company aims to communicate with all affected clients within the next few days, notifying them of the changes to their interest rates.
Mars will be obliged to respond in a written format within a 40-day frame to any written complaints submitted by clients impacted by changes. In instances where the firm’s resolution doesn’t appease the clients, they are entitled to raise the issue to the Financial Services and Pensions Ombudsman.