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 January 2011 - Comments: 12193 - Articles: 1395
11:51 AM, 30th November 2013, About 12 years ago
Reply to the comment left by “LucyM ” at “30/11/2013 – 11:42“:
Hi Lucy
The fund raising was suspended following further investigations so you may have registered your interest at that time.
IMPORTANT – TO ALL
Much work has continued in the background and Justin expects to hear back from a QC during next week. The outcome of that will be reported in due course.
.
Member Since September 2013 - Comments: 232
12:01 PM, 30th November 2013, About 12 years ago
Hi Mark, I think you are right. So long as I am still in for the future. Thanks. L
Member Since January 2011 - Comments: 12193 - Articles: 1395
12:12 PM, 30th November 2013, About 12 years ago
Reply to the comment left by “LucyM ” at “30/11/2013 – 12:01“:
Hi Lucy
When we suspended the fundraising it was agreed with Justin that details of all further interested parties would be retained by Property118 until the fund raising recommenced. Therefore, it is likely that Justin will not have your details at this stage but rest assured, you will be contacted by him when we are ready to progress matters again.
Member Since October 2013 - Comments: 35
9:04 PM, 3rd December 2013, About 12 years ago
Don’t know if anyone has noticed a couple of pieces in the Irish Times in the last few days relating to the bank’s need for further capital, increased provisioning & risk-weighting of assets – assessment carried out independently by Central Bank of Ireland.
can be seen on the Irish Times website
Paul B particularly might find the comments interesting in light of his views expressed earlier about the financial health or otherwise of BOI !
Member Since November 2013 - Comments: 85
5:33 AM, 4th December 2013, About 12 years ago
Yes, seen them. My reading of it is that the central bank disagree with the BofI’s provisioning, you see the central bank has its own methodology for calculating these things. The result is the central bank don’t believe the BofI had as strong a reserves figure as the BofI believe, yet it’s still above the minimum the anticipated new rules are looking for. Meanwhile the BofI say the methodology used by the central bank doesn’t fit the curcumstances of the BofI, that the board believes its own provisions to be correct and anyway both because the bank is above the anticipated reserves requirement and making headway in its steps to return the bank to profitability – care of you guys- it doesn’t need any more capital. What is also interesting is that the central bank had been in to the BofI and independently assessed the UK mortgage loan book and found it not to be problematic. In summary, more grist to the mill with our arguments, certainly nothing adverse in the announcements. But it may be evidence of a gulf between the central bank and the management of BofI which we may be able to exploit later.
Member Since October 2013 - Comments: 35
7:52 AM, 4th December 2013, About 12 years ago
& now BOI is about to launch a market fund raising exercise it all gets very murky
indeed – is the market being misled?
My money would be on the regulator & their assessment is only preliminary to ECB risk assessments coming up shortly
Member Since September 2013 - Comments: 35
7:20 AM, 15th December 2013, About 12 years ago
Received a letter yesterday out of the blue from Bank of Ireland Group, Bank of Ireland Financial Services, based in Belfast. Letter was headed “Important announcement re Bank of Ireland Financial Services”.
“…following a strategic review the decision has been made to close Bank of Ireland Financial Services. Recent regulatory changes have imposed a number of requirements on us that will have a significant impact on the profitability of the business and, more importantly, our long term ability to service our customers. We have therefore, regretfully, taken the decision that, with immediate effect, Bank of Ireland Financial Services is no longer able to provide advice services to new customers. Full closure is planned to be completed by early 2014 at which point advice to existing customers will cease also…” They also include two pages of Q&As.
They say no other BoI products such as savings or mortgages are affected by this announcement. They also say that they are announcing an agreement with Legal & General Ltd to provide financial planning advice on a telephone basis.
Anyone with any queries is advised by BoI to contact them by telephone, email or by writing to their NI Customer Care Team, in Temple Quay, Bristol.
Member Since September 2013 - Comments: 232
9:31 PM, 16th December 2013, About 12 years ago
Does anyone know what the term Financial Services refers to?
Member Since August 2013 - Comments: 126
11:07 PM, 16th December 2013, About 12 years ago
Reply to the comment left by “LucyM ” at “16/12/2013 – 21:31“:
Investments, insurance, pensions.
Member Since July 2013 - Comments: 264
3:47 PM, 20th December 2013, About 12 years ago
Justin
You said that there is some interesting news on the BoI case a couple of weeks ago that you was going to update us on ?