Bank of Ireland increase differential on tracker rates


Readers Question - Published on 28/02/2013
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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.

The deadline for submission of instructions has now expired. However, it may still be possible to join the representative action subject to paying Court fees and an additional cost to cover associated administration. For details please email : carla@cotswoldbarristers.co.uk

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Readers QuestionsLee, 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:

6 INTEREST

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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