Bank of Ireland increase differential on tracker rates

Rejection letter going to Bank of Ireland tomorrow. constructive comments greatly appreciate before it goes off & i'll make changes. At least we all need to get the ball rolling, cant afford another wasted work day messing around with this!

Everyone feel free to copy & alter accordingly.

FORMAL LETTER OF COMPLAINT TO BANK OF IRELAND & REFUSAL OF MORTGAGE RATE INCREASE.

In response to your letter 25th February 2013.

I do not accept any change to my bank base rate tracker mortgage product, which clearly states ‘the interest rate we charge will track base rate for the whole mortgage term’ with a rate stated of 1.75% fixed above Bank of England’s base rate.

It also states in the terms of the Promotional Rate Conditions – “After this date the interest we will charge will track base rate for the remainder of the mortgage at a fixed differential of 1.75% above base rate.”
Whist there are inclusions relating to the ‘Differential’ this is very ambiguous.
Therefore, the Bank of Ireland has either mis-sold or mis-led me into a product that I believed was a ‘Fixed Base Rate Tracker’ when you are now implying it is a ‘Variable Rate Tracker’.
If the bank is prepared to offer rates & figures of 1.75% fixed differential for the term of the mortgage, then that is what it should be or the mortgage has been mis-sold by you the bank.

These proposals of increasing the differential from 1.75% to 4.49% are totally unjustified & unfair terms, when average mortgage tracker products are 2%-2.5% for the term of the mortgage.

You have given no explanation how you have arrived at the proposed new differential figure & clearly stated the rate was fixed at 1.75% for the term of the mortgage.
Your proposals are unreasonable & an unfair rate rise. It is not mine or any other Bank of Ireland customers responsibility to prop up your business which is claiming the fault of adverse market conditions. Interest rates have been 0.5% since March 2009. The bank should accept its mistakes over its own financial shortcomings. Also, the fact in your booklet provided with your letter ‘Understanding the changes to your Buy to Let Base Rate tracker differential’ quoting….’Is the Bank of Ireland doing this because it is in financial difficulty?’ with the answer as & I Quote ‘No. Bank of Ireland has a strong mortgage business in the UK’

I await your reply at your earliest convenience & should you not withdraw or greatly revise your proposals with clarity & honesty to allow me to make an informed decision, I will have no hesitation to take this to the Ombudsman & further onto the courts.

Until a fair & satisfactory solution is arrived at, I do not authorise Bank of Ireland to collect via direct debit anything other than the current original amounts from my bank account for the ‘Fixed differential, Base Rate Tracker’ of 1.75% above base that was agreed in 2004 in the original contract.

Good Luck everyone.

@ Darrell G

Be careful not to rush into a reply.

You may wish to wait for a carefully worded legal template to be posted on this forum by Mark Alexander.

Whatever you do, good luck.

Thanks Richard, Ive actually emailed Mark Alexander today & he has said he is looking at getting a correct draft for the Ombudsman. We all need to make our complaints to the Bank of Ireland in the first instance, who thereafter are allowed 8 weeks to respond.

If anyone thinks I've missed something please post it for me to amend my letters.

Cheers Darrell G

@Darrel G

I suggest you hold fire and wait to see what the lawyers come back with. There is ambiguity as to whether the "Differential" actually applies to the margin or something else.

I don't like the words "fixed base rate tracker" and "variable base rate tracker" in your letter and think these could do you more harm than good.

If you feel you MUST send a complaint now, I at least suggest you remove the following words from your draft

"Therefore, the Bank of Ireland has either mis-sold or mis-led me into a product that I believed was a ‘Fixed Base Rate Tracker’ when you are now implying it is a ‘Variable Rate Tracker’. "

AND

"If the bank is prepared to offer rates & figures of 1.75% fixed differential for the term of the mortgage, then that is what it should be or the mortgage has been mis-sold by you the bank."

AND

"These proposals of increasing the differential from 1.75% to 4.49% are totally unjustified & unfair terms, when average mortgage tracker products are 2%-2.5% for the term of the mortgage."

With regards to engaging lawyers, the really big hitters I've spoken to so far seem reluctant to take on the BOI for fear of losing business from them or other major banking institutions.

The plot thickens!

Cheers Mark. I'll hold fire for a while & see what develops. Thanks for the pointers.

Thank you to John Brookman for providing a PDF of the Bristol and West Residential Mortgage Conditions 2001 booklet which can be downloaded via this link >>> https://www.property118.com/wp-content/uploads/2013/03/Bristol-and-West-Residential-Mortgage-Conditions-20012.pdf

Thanks also to Gary Smith for reducing the file size from 7mb to just 700kb to make download so much faster 🙂

I notice this from BBC website:

Bank of Ireland has recorded a loss of 1.8bn euros (£1.6bn; $2.3bn) for 2012.

The lender saw little respite in the rate at which it had to write off bad loans due to the property crash.

The bank took 1.7bn euros in impairment charges, versus 1.9bn in 2011, of which 462m euros was on mortgages and 797m on construction and property loans.

These charges dragged the 15%-state-owned bank into the red for the year. In 2011 it turned a 40m-euro profit thanks to a debt write-off.

The agreement by the Bank of Ireland's lenders to accept shares in lieu of the money owed to them generated a one-time gain of 1.8bn euros in 2011, which masked what would otherwise have been an equally dreadful year for the bank.

Chief executive Richie Boucher said 2012 had been "another challenging year", but added that the group had made "good progress" against its objectives including rebuilding profitability.

As a result, the number of customers defaulting on mortgages and loans was still going up, but at a slower rate, the bank said.

Last month, Bank of Ireland was criticised for increasing the interest rate on its Base Rate Tracker mortgages, despite the official rate remaining at 0.5%.

Some 13,500 borrowers with mortgages from Bank of Ireland and its subsidiary Bristol and West will see their rates almost double.

This move stemmed from attempts by the group to increase the money it makes on loans and deposits, which fell in 2012 to 0.96% from 1.01% a year earlier.

In its statement, the group said that changes such as cutting the interest its pays on customer deposits, as well as increasing its standard variable rate on UK mortgages by 1.5 percentage points, had improved margins towards the end of the year.

The bank was also hit by the cost of redundancies, which totalled 150m euros. About 1,200 employees - 9% of staff - had taken voluntary redundancy since May. More staff are set to leave in 2013, it said.

Last August, Bank of Ireland extended its deal to provide its financial products via the UK Post Office for another three years, to 2023.

The value of customer deposits rose from 16bn to 19bn euros during the year, exceeding expectations.

So they want us to pay for their bad business practices in Ireland? I'm kind of looking forward to this!

RE Maria "Unable to sell because first time borrowers cannot get a mortgage for my house due to the banking crisis. You cannot expect customers to pay for the bank mistakes !!"

Probably priced to high. A first time buyer can easily get a mortgage of 3-4 times salary with 20% deposit.

Banks have simply gone back to sensible lending and require bigger deposits for protection against price falls of our inflated property values.

Gavin. Give it a rest. You had your five minutes in the sun. Now move along. You are clearly not on the receiving and of BOI change of policy. Good for you. Please don't try preaching to loyal customers of BOI who now are on the receiving end.

As stated many times already, this is all about contract and hidden or explicit T's and C's. You have, to date, added nothing to this thread. Good-bye.

@Gavin, you are entitled to your opinions but I will not allow you to post them here unless they are constructive to landlords and/or letting agents. If your posts are reported by members again for not being constructive you will be banned from posting on this forum. You have been warned.