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.
___________________________________________
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?
Comments
Have Your Say
Every day, landlords who want to influence policy and share real-world experience add their voice here. Your perspective helps keep the debate balanced.
Not a member yet? Join In Seconds
Login with
Previous Article
Development Finance Terms and Criteria updateNext Article
Offsetting property income tax - READERS QUESTION
Member Since October 2014 - Comments: 274
10:04 AM, 16th April 2015, About 11 years ago
Here’s a link to Council of Mortgage Lenders, CML, “Statement of Practice on Buy-to-Let Mortgage lending that BoI has adopted (6 pages in total)
Although after the event for those Landlords already affected there are many others who could be affected in the future depending the outcome of the ensuing case.
I haven’t read through it all yet to see if there is anything helpful, or if it has any teeth for Lenders who don’t adhere to its principles.
Here’s the link : http://www.cml.org.uk/cml/filegrab/?ref=9304
According to the CML website 31 Lenders (out of the 128 CML members) have signed up to this to date.
1. Accord Mortgages
2. Aldermore
3. Bank of Ireland
4. Barclays
5. Coventry Building Society
6. Deutsche Bank
7. Fleet Mortgages
8. Foundation Home Loans
9. GE Money
10. Hinckley & Rugby Building Society
11. HSBC
12. Kensington
13. Kent Reliance
14. Leeds Building Society
15. Lloyds Banking Group
16. Market Harborough Building Society
17. Monmouthshire Building Society
18. National Counties Building Society
19. Nationwide Building Society
20. Nottingham Building Society
21. Paragon Mortgages
22. Precise Mortgages
23. Principality Building Society
24. Royal Bank of Scotland (inc. NatWest)
25. Santander
26. Skipton Building Society
27. Tipton & Coseley Building Society
28. TSB
29. UK Asset Resolution
30. Ulster Bank
31. Virgin Money
Member Since June 2013 - Comments: 1121
10:12 AM, 16th April 2015, About 11 years ago
Barry, if it’s a Code Of Practice it really isn’t worth the paper it’s written on in the case of BOI. They will rob their granny for 10p to boost their bottom line.
Member Since October 2014 - Comments: 274
11:26 AM, 16th April 2015, About 11 years ago
Gary
I agree, it doesn’t have any teeth as such, but it does allow us to rattle the bars of CML who in turn might apply a little pressure. Who knows?
But it won’t look good that having signed up to a code of practice they then immediately ignore. It won’t be good PR for BoI or CML
Member Since January 2011 - Comments: 12193 - Articles: 1395
1:47 PM, 16th April 2015, About 11 years ago
Comments: 15
9:49 PM, 20th April 2015, About 11 years ago
£1000 paid into BARCO ‘Early Adopter’ account, good luck !
Member Since October 2013 - Comments: 66
4:05 PM, 22nd April 2015, About 11 years ago
Hi – sorry for having been off the forum for so long. Last i heard was that funds were being raised for an appeal with various options?
Keen to continue supporting this – can anyone point me in the right direction please re. instructions for the next step.
Thanks.
Member Since October 2013 - Comments: 66
4:05 PM, 22nd April 2015, About 11 years ago
Ops may be on the wrong forum – re. West Brom?
Member Since January 2011 - Comments: 12193 - Articles: 1395
4:13 PM, 22nd April 2015, About 11 years ago
Reply to the comment left by “Deceived by West Brom ” at “22/04/2015 – 16:05“:
You are indeed on the wrong forum, please head over to the secure members forum.
Meanwhile I have replied to your offline email 🙂
.
Member Since May 2015 - Comments: 7
5:20 PM, 8th May 2015, About 11 years ago
Hi mark are we on course for the magic 50, my money being sent Monday.lets hope people get there hand in there pocket as I have a feeling this will be are last stand,come on guys let’s get behind this ,it’s now or never! Many thanks mark with all your help in the above matter,
Member Since March 2012 - Comments: 16 - Articles: 4
5:28 PM, 8th May 2015, About 11 years ago
Reply to the comment left by “Richard Gregg” at “08/05/2015 – 17:20“:
Hi Richard, sadly not, we are quite a long way off course. There have only been 5 people paid up so far but you and one other has committed today. I’m hoping people are just waiting until the last minute to part with funds but I’d be lying if I said I’m confident the target will be reached. I don’t know what else I can do.
.