Bank of Ireland increase differential on tracker rates
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.
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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:
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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Member Since November 2013 - Comments: 85
10:33 AM, 24th November 2013, About 12 years ago
Reply to the comment left by “Colin Childs” at “22/11/2013 – 19:16“:
http://bit.ly/1efWRBY – my current views.
Member Since June 2013 - Comments: 1121
11:13 AM, 24th November 2013, About 12 years ago
Paul a very well balanced article at the link. Certainly key is that the clauses triggering the differential must be satisfied for the increase to be legal. And that means disclosure of what they term “commercially sensitive information”. They cannot hide behind this phrase. I am starting to favour a County Court Claim to spark the debate into life.
Member Since September 2013 - Comments: 333
11:33 AM, 24th November 2013, About 12 years ago
Reply to the comment left by “Paul Brindley” at “24/11/2013 – 10:33“:
Paul,
I just read your article and it’s a very good summary with lots of detail and well structured arguments.
I hope you win the case against the lender who is seeking possession of your client’s property.
Member Since November 2013 - Comments: 85
12:22 PM, 24th November 2013, About 12 years ago
Reply to the comment left by “Richard Kent ” at “24/11/2013 – 11:33“:
I suspect the bank will do their level best to avoid a precedent being set.
Member Since November 2013 - Comments: 85
12:26 PM, 24th November 2013, About 12 years ago
Reply to the comment left by “Gary Nock” at “24/11/2013 – 11:13“:
Me too, that’s why we’re paying 2.99 per cent interest – the 0.5 percent plus their 2.5 per cent discretion, inviting them to ‘come and have a go’. Would be great if every borrower did the same – there are rumours of a payment strike in Ireland too.
Member Since September 2013 - Comments: 333
5:35 PM, 24th November 2013, About 12 years ago
Reply to the comment left by “Paul Brindley” at “24/11/2013 – 12:22“:
I totally agree.
It’s not a case they can afford to loose.
For example delay tactics etc on behalf of the lender etc might intentionally delay a precedent being set.
Personally I think it would be difficult for them to argue their way out of the points you have raised.
Member Since July 2013 - Comments: 264
8:22 PM, 25th November 2013, About 12 years ago
Paul Brindley
Just seen your post on Martin lewis BoI forum would it not be best to join forces with Justin rather than to get mortgagees to sign up to a court case with you ??
Member Since September 2013 - Comments: 333
9:23 PM, 25th November 2013, About 12 years ago
Reply to the comment left by “ian ” at “25/11/2013 – 20:22“:
Hi Ian,,
You may wish to read a bit more about Paul and what he does.
He is dealing with a client who is being threatened with repossession.
I’m sure he will explain it to you.
Member Since January 2011 - Comments: 12193 - Articles: 1395
9:33 PM, 25th November 2013, About 12 years ago
Justin is still working on this case, I can assure you of that. Only today I was cc’d into an email to Justin by an affected borrower who has applied online to take BoI to the small claims court for compensation for refinancing. The BoI’s defence was emailed in full to Justin and I was copied in. I am also privy to Justin’s response. Please also bear in mind that we have a QC considering our barristers opinion and BoI’s AC’s response. Just because we are not posting here every day please do not think we have forgotten the BoI case. Justin is also in regular contact with the FCA which has gone on record confirming they will be starting an investigation into tracker rate increases and the principles “treating customers fairly” in the New Year
.
Member Since November 2013 - Comments: 85
9:55 PM, 25th November 2013, About 12 years ago
Reply to the comment left by “Mark Alexander” at “25/11/2013 – 21:33“:
No, he’s certainly not forgotten this.
But I do think we should turn up the heat on B of I in other ways too.
Like a payment strike – paying only 2.99 per cent. That’s what my client is doing because we believe there is a valid reason for doing so. If every B of I borrower does this, we will have them on their knees. Especially if we talk more to our Ieish counterparts who are now seeing their homes repossessed in their hundreds. I get the impression the heat is being turned up over there too by the sheer weight of disgruntled borrowers.
Don’t forget too that over here the B of I is hidden in some respects – few know that all the little old ladies who bank with the Post Office are handing their money over to the B of I, who then give them precious little interest yet, despite their uk mortgage book bring clean as a whistle, then out a massive uplift on the little old ladies, charging uk borrowers an excessive amount that many think is legally unjustifiable. Wouldn’t the public just love to know what is really going on? Isn’t there another way to spin this?