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 October 2014 - Comments: 7
6:52 PM, 1st October 2014, About 12 years ago
I called FOS 2 days ago, they said that they were now making decisions on all Bank of Ireland SVR cases. Apparently they are grouping up similar cases and replying to successful and unsuccessful groups all at once. I suppose some of the facility letter wording and sales processes were different. I have already completed one of the questionnaires and I was told that i should expect a decision within a couple of weeks.
I’ll post on here once i hear either way and summarise my position. Would be interesting to hear if anyone has had a decision yet.
Member Since October 2014 - Comments: 7
1:41 PM, 20th October 2014, About 11 years ago
Just been on the phone to f.o.s. i was waiting on a decision abouz my residential tracker morgage. the chap i spoke to said that b.o.i. had not acted wroney and werr within their rights to increase my payments and i would get a letter from them witbin the next few days confirming this 🙁
Member Since January 2011 - Comments: 12193 - Articles: 1395
1:54 PM, 20th October 2014, About 11 years ago
Reply to the comment left by “Im Screwed” at “20/10/2014 – 13:41“:
Funny how the FOS have decided that they are not in a position to consider the West Brom case now that it is going to Court but that do feel able, not only to consider but to make a ruling on the BoI case, isn’t it?
You are only screwed if you allow the FOS to get away with this!
.
Member Since November 2013 - Comments: 252 - Articles: 10
2:05 PM, 20th October 2014, About 11 years ago
I agree with Mark A.
Also-interesting that they are willing to reply to groups of complainants rather than one by one, contrast to the WB case where they insist on sending an identical letter of rejection on each one!
I am thinking whether judicial review could be fruitful, I would like to see the letter when it lands.
Member Since October 2014 - Comments: 7
2:15 PM, 20th October 2014, About 11 years ago
So what are you saying? Should i challenge fos on their decsion ? can you challenge them i assume i would need a lawyer that i cant afford!
Member Since June 2013 - Comments: 1121
2:20 PM, 20th October 2014, About 11 years ago
Mmmm. Interesting. Had a letter from FOS saying my case has now been allocated to a case worker. And by the way can you tell me how many BTLs do you own? Obviously to find out if we are “consumers” and have more protection than if we are professional landlords. I have asked Justin if I should provide such information but I think he is away at the moment. Has anyone else had such letters?
Member Since September 2013 - Comments: 232
2:31 PM, 20th October 2014, About 11 years ago
We sold a property to pay off BOI mortgage, the BOI loan was half the amount of a loan we were paying to another bank and it was costing us roughly £100 per month more for half the amount. If all our past payments went to the insurance company, there is no incentive for us to join the class action.
Member Since September 2013 - Comments: 232
2:33 PM, 20th October 2014, About 11 years ago
Is the route the West Brom clients are taking completely out of the question?
Member Since January 2011 - Comments: 12193 - Articles: 1395
2:41 PM, 20th October 2014, About 11 years ago
Reply to the comment left by “LS ” at “20/10/2014 – 14:33“:
No it isn’t, HOWEVER, I suggest we await the outcome of the West Brom case because riding on the back of PR from that case is the only way I can see that the necessary numbers will be amassed.
.
Member Since July 2013 - Comments: 89
2:44 PM, 20th October 2014, About 11 years ago
I had a letter the other day off FOS because I’d just forgot to sign something on the form. They also asked …..BTW How many BTL properties do i have in total?