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 June 2013 - Comments: 1121
6:12 PM, 20th October 2014, About 11 years ago
They are gearing up to dismiss the claims on the basis we are not consumers I think. Mark do you know if Justin is back in the office so we can seek advice as to a reply?
Member Since November 2013 - Comments: 85
7:12 PM, 20th October 2014, About 11 years ago
Even if they do, I think I have the magic bullet that will defeat them! If you recall they tried to repossess my client’s home last Summer, I sent them scurrying to the hills. With no cohonas for a fight.
Member Since July 2013 - Comments: 89
7:18 PM, 20th October 2014, About 11 years ago
Reply to the comment left by “Gary Nock” at “20/10/2014 – 18:12“:
Hi Gary,
My understanding, from really early comments on this forum, is that you are a consumer regardless of how many properties owned as long as the BTL properties are not your main source of income.
Maybe Justin can reconfim this?
Member Since November 2013 - Comments: 85
7:23 PM, 20th October 2014, About 11 years ago
Reply to the comment left by “Paul Brindley” at “20/10/2014 – 19:12“:
Oh, and my client isn’t paying the increased interest rate, he’s still paying the old rate!
Member Since June 2013 - Comments: 1121
9:08 PM, 20th October 2014, About 11 years ago
Hi Darrell,
I have looked through but cannot see anything. I seem to remember it was something to do with the number of BTL mortgages you have. And this seems to be what the FOS are harping on about.
Member Since July 2013 - Comments: 9
10:04 PM, 20th October 2014, About 11 years ago
Reply to the comment left by “Paul Brindley” at “20/10/2014 – 19:12“:
Paul, I wish they wouls scurry to the hills for me… the have placed one of my properties in the hands of the receiver as I owe them £855!! ( of which £175 is fees), and I’m paying MORE than the increased amount, unfortunately I’m unable to afford legal representation…. so feel free to pass a silver bullet my way :-D…. Incidentally I have 7 BOI mortgages so they class them as a portfolio, even though they aren’t linked to each other…. how I love the BOI. Pete.
Member Since October 2014 - Comments: 7
10:35 PM, 20th October 2014, About 11 years ago
I have one residential tracker mortgage with boi
The case handler I spoke to at the fos said my complaint against the boi had been dismissed because
The mortgage was never sold as a ‘lifetime ‘ tracker
The relevant clause was in the contract that allowed boi to increase the rate if certain conditions arose
They felt boi had made us aware of the clause within their literature
They had looked at boi financials and they could see that boi needed to implement actions to improve their balance sheet
Boi had satisfied the fos that they were loosing money on my mortgage, I was paying 1% above base
If I hadn’t have dialled the number for the fos myself I could have been mistaken thinking that I was talking to boi. The case handler took great joy in sympathising with boi. He said I should have all of the above in writing in a few days
The only upside was that they were going to force boi to let us out of our mortgage without fees blah blah blah
Member Since June 2013 - Comments: 1121
10:48 PM, 20th October 2014, About 11 years ago
Not looking good then. Looks like a FOS/BOI stitchup.
Member Since October 2014 - Comments: 7
10:56 PM, 20th October 2014, About 11 years ago
It felt like they guy at the fos was reading from a copy of the letter that the boi had sent me when they first advised that the rate was increasing.
Same old same old banks can’t loose. We all speculate to a degree when choosing our mortgage product as the banks do when they offer these products, except they have the luxury of a clause that allows them to shaft us if they realise their obese bonuses have hurt their balance sheets.
Member Since July 2013 - Comments: 9
11:24 PM, 20th October 2014, About 11 years ago
Reply to the comment left by “Im Screwed” at “20/10/2014 – 22:56“:
100% agree with this!!!