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 September 2013 - Comments: 232
7:54 AM, 2nd May 2014, About 12 years ago
GHH, good luck. What you say makes good sense, hopefully you will get good justice.
Member Since September 2013 - Comments: 35
12:51 PM, 2nd May 2014, About 12 years ago
Reply to the comment left by “Gary Nock” at “01/05/2014 – 19:57“:
Gary, I too have had a reply, they haven’t even started on my complaint yet (!) a year and a month later, I will post more details here when I get a min over the weekend. Theresa
Member Since June 2013 - Comments: 99 - Articles: 2
2:57 PM, 2nd May 2014, About 12 years ago
Dear All,
Yesterday we received letters from the Financial Ombudsman Service to all BOI complainants. The letters enclosed a factsheet relating to BOI interest rate complaints.
The factsheet states that FOS have made some preliminary decisions as to the fairness of BOI’s decision. They also say that they have asked BOI and some of the complainants for further information. Once they receive this, they will be in touch again.
We spoke to FOS and understand that some of the letters requesting further information did not reach us. They have sent the questionnaire to us again and will allow those people questioned sufficient time to respond. We will circulate the fact sheet and questionnaire by email.
The FOS have explained that each case will be considered individually.
We believe this is a positive move, in that they haven’t rejected everyone’s claims. The issue is that there are a number of different groups of borrowers and the decisions may be different in each case – so they may reject some complaints and uphold others.
In the meantime, we are meeting with an insurer on 20th May to discuss litigation and after the event insurance, in the event that the FOS investigations come to nothing.
We are hopeful that this is a positive step.
If you would like to join the action, please will you contact us at [email protected]. We need to build a sufficient fighting fund in order for us to bring an action against BOI. If we don’t raise enough money to proceed, we will refund the money less our admin costs.
Member Since October 2013 - Comments: 7
4:17 PM, 7th May 2014, About 12 years ago
Things not looking good for me _ FOS not received complaint form
Received a call today from boi to advise arrears on the account ( i have been paying original payment,arrears accured due to rate increase) and to inform that they intend to take matters further, and next step would be to send a property inspector to visit the property to obtainr information from the tenants and check condition of the property.
i told boi i have lodged a complaint with fos and awaiting outcome. They asked to check with fos if complaint received as by now i should have received a acknowledgement letter and boi should have been informed by fos that my complaint is being looked at.
I called fos, was upset to hear that they have not received anything from me, but the person i spoke was very helpful took some basic details and issued me with case / ref no, and said will post another form to complete and return., and once completed forms received they will notify boi that they are looking into my complaint, and hopefully boi may delay taking any further actions.
Anyone else threatened with further action because of arrears due to rate increae?
Member Since January 2011 - Comments: 12193 - Articles: 1396
4:41 PM, 7th May 2014, About 12 years ago
Reply to the comment left by “abdul salique” at “07/05/2014 – 16:17“:
If they take you to Court I’m sure Justin would be very keen to defend you as this could Fast-track the case against BoI very cost effectively. The risk of course is that if you lose you property will be repossessed. If BoI lose they have far more at stake. On that basis they may just live with the status quo so as not to endanger the extra income they are making from all the people who are paying in full. It’s comparatively high stakes all round!
.
Member Since April 2014 - Comments: 17
4:46 PM, 7th May 2014, About 12 years ago
Are there many people who are still paying the pre hike rates?
Member Since January 2011 - Comments: 12193 - Articles: 1396
4:48 PM, 7th May 2014, About 12 years ago
Reply to the comment left by “Paul Harris” at “07/05/2014 – 16:46“:
You are the only one I’m aware of who’s not been paying the increased rate.
.
Member Since June 2013 - Comments: 99 - Articles: 2
4:55 PM, 7th May 2014, About 12 years ago
Reply to the comment left by “abdul salique” at “07/05/2014 – 16:17“:
Hi Abdul
As Mark Alexander has suggested, I would be very happy to discuss your case with you. I am aware of other people who are refusing to pay the increased payments to BOI and are sticking with the original amounts.
I would suggest we continue our discussions either on the secure forum or via email. You can email me at [email protected]
Thanks
Justin
Member Since July 2013 - Comments: 89
5:05 PM, 7th May 2014, About 12 years ago
Reply to the comment left by “abdul salique” at “07/05/2014 – 16:17“:
I only paid the original amount on my affected properties but as with my complaint about the rate rise, it just fell on deaf ears & the banks ‘wheels in motion’ began to turn. I was being threatened with repossession on the properties, but because of the pressure & mainly hassle they gave me I decided to just pay the extra to get up to date until the class action case is started.
Justin, Out of interest, if & when the case is won against BoI will the bank be forced to repay all the said monthly overpayments & compensation?
Member Since July 2013 - Comments: 9
7:27 PM, 7th May 2014, About 12 years ago
I am now paying the increased amount plus a small extra figure to try to reduce the arrears accrued after the rate rise when I couldn’t initially afford the increase. I have just found out that the BOI are charging me £25 a month because I haven’t arranged this with them…. even though I am paying more than my contractual payment!!! As a result, my arrears are still increasing… you couldn’t make it up!