Bank of Ireland increase differential on tracker rates

Bank of Ireland increase differential on tracker rates

10:32 AM, 28th February 2013, About 11 years ago 1862

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The story of the Bank of Ireland decision to increase to the differential (interest rate margin) on  tracker mortgages started on this forum when a professional landlord contacted Property118 within minutes of a letter from Bank of Ireland landing on his door mat. What ensued was outrage from landlords and affected residential mortgage borrowers. The story was quickly picked up by the National Media as it wasn’t just the 13,500 affected borrowers who were worried.

Will this set a precedent for other mortgage lenders to follow?

Property118 reacted by using funds donated to The GOOD Landlords Campaign to underwrite the cost of a barristers opinion on the legality of the Bank of Ireland’s actions. The remainder of this thread,one of the most read and most commented threads of all time on Property118, continues to tell the story as it unfolds.

If you want to skip the story and cut to the chase simply CLICK HERE

Of the 13,500 affected borrowers, 1,200 have had the decision reversed by Bank of Ireland. With additional support and pressure we believe all affected borrowers can and will see justice done.


Lee, a professional Landlord asks, “help! I have just received a letter from the Bank of Ireland stating they want to increase the differential on my tracker rates.

I have 12 mortgages with the Bank of Ireland previously Bristol and West. I have been on a base rate tracker of 1.75% above base, but now Bank of Ireland are using some fine print claiming they have to recapitalise and saying the ‘new differential will be 4.49%.

How can I fight back?”

The original policy wording seems to be:


Charging interest at a tracker rate

(j) Unless we change the differential (if any) under condition 6 (n), we will not change the tracker rate unless the base rate changes.

(m) in condition 6 (n):
– a “positive differential” means a percentage which we add to the base rate to arrive at the tracker rate; and a “negative differential” means a percentage which we subtract from the base rate to arrive at the tracker rate.

(n) We may reduce a positive differential or increase a negative differential at our discretion by giving you not less than seven days written notice. This means that we can change the differential in a way that is favourable to you.

The above seems to indicate that they can reduce the rate in my favour, but not give them the right to increase it. Am I correct?

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Neil Patterson

10:35 AM, 28th February 2013, About 11 years ago

My reading of the above clauses in plain English would seem to indicate that they can move the differential but only below or up to you existing contracted rate.

10:53 AM, 28th February 2013, About 11 years ago

I have two mortgages taken out in 2004 with the B & West with the same problem. Incidently in Jauary the bank Of ireland offered us £8500 (per loan) cashback as an incentive to discharge the mortgage by the ennd of March, now they have sprung this on us and now the rental incomes will not cover the repayments yet the original t's & c's say that the rent income must be greater than the repayments !
I am disgusted by their behaviour - massive double standards on thier part.
I am considering maintaining my present repayments as they are now and wait for them to take me to court to re-possess whereupon I will fight it in court.

10:54 AM, 28th February 2013, About 11 years ago

PS : My rate has changed from 2.25 (1.75 above base) to 4.99% are u sure yours is only 4.49% ?

Neil Patterson

11:37 AM, 28th February 2013, About 11 years ago

It seems like they are writing to all their tracker clients judging by the numbers that have been received today.
If they are allowed to get away with this how long before other lenders join the band wagon?

11:54 AM, 28th February 2013, About 11 years ago

The same thing has happened to me. I have an ex-Bristol and West Tracker at 1.75% over base and they have chnaged this to 4.49% over base. I am seething as I couldnt find anything in my terms to allow them to do this.
Can someone advise how they can do this, and what I should do now?

12:01 PM, 28th February 2013, About 11 years ago

Bank of Ireland can't be allowed to get away with this, If they do thousands of BTL Landlords will have major problems.
I am just hoping and praying that the lenders can't get away with this as this would be devastating for the entire industry.
Like most other Landlords who read this article I will be checking the small print of my offer letters very carefully this evening. Maybe all Landlords with Bristol and West or BofI mortgages should get together to fund the costs of professional legal representation to fit this action as a group?
This may well be worth taking up with any Landlord associations you are a member of as it will also affect several of their members.

Lee Gough

12:05 PM, 28th February 2013, About 11 years ago

Hi Jim, it’s the differential that has increased from 1.75% to 4.49% plus bank base of 0.5% which gives the new pay rate of 4.99%. Sorry for any confusion. I have since phoned Bank of Ireland and now have lodged a formal complaint, which they said would be pointless as they tell me they have checked their rights with the FSA and are allowed to do this! My worry is if this allowed will my other lenders follow suit?

Neil Patterson

12:10 PM, 28th February 2013, About 11 years ago

Hi Lee,

They cannot tell you not to make a complaint that is your right to do so if you wish. They are only saying that because they don't want to have to deal with it.

I suggest all Landlords who get this letter use the complaints procedure as it costs them £500 every time they have to go to the Ombudsman !!!

If they get thousands of complaints to deal with they may back down.

Lee Gough

12:50 PM, 28th February 2013, About 11 years ago

Action Taken so far.I have made official complaint for each separate mortgage account, not as a group as this will cost them more Contacted CNBC, Money Box, WatchdogI also plan on taking Bank of Ireland to court after the first new payment is taken out of my account and claiming for the different between the original payment and the new payment amount.This is a very simple process. Simply open an account with Money Claim on LineThis is very quick and easy to do.

13:13 PM, 28th February 2013, About 11 years ago

We must all absolutely flood the financial services ombudsman with complaints about this reprehensible behaviour - how can a bank that is having to save more reserves precisely because of banking industry behaviour then use that excuse as a means of hiking agreed rates? Disgraceful.

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