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 January 2011 - Comments: 12193 - Articles: 1395
12:45 PM, 9th June 2016, About 10 years ago
How about calling FOS and insisting they reverse their decisions on BoI in light of the WB case
.
Member Since September 2013 - Comments: 232
1:29 PM, 9th June 2016, About 10 years ago
Reply to the comment left by “Mark Alexander” at “09/06/2016 – 12:45“:
Good advice, the letter was already in my head. I am not expecting anything to happen though.
Member Since August 2015 - Comments: 9
2:02 PM, 9th June 2016, About 10 years ago
I rang up the financial ombudsman to find out what they were going to do in light of this. They were very vague and tried to fob me off. I was not happy with their decision originally when I complained to them. They just sent everyone a standard response. I did appeal but nothing came of it. Now they are telling me that they need to wait for guidance. Who are they waiting guidance from and can they actually do anything to reverse their decision. They told me not to expect a reply unless they get some “guidance”.
Member Since October 2014 - Comments: 7
2:36 PM, 9th June 2016, About 10 years ago
I’m paying £486 a month more on my residential base rate tracker because these crooks wanted larger bonuses to further boost their lavish lifestyles Sadly I don’t have £600 to cough up but I got a lotto ticket so you never know !
Member Since January 2011 - Comments: 12193 - Articles: 1395
2:40 PM, 9th June 2016, About 10 years ago
Time to serve up some Karma on the FOS I think.
See my latest article https://www.property118.com/is-the-fos-fit-for-purpose/87679/
.
Member Since August 2015 - Comments: 9
3:05 PM, 9th June 2016, About 10 years ago
I have rung up bank of Ireland. After jumping through hoops they put me through to someone and all they could say they cannot comment. They were urging me to write in but what is the point when they will only say no comment. It sounded like that they knew about the implications for them and are buying time by saying no comment. Everyone should complain to the bank of Ireland and the FOS and get this sorted for once an all. The whole thing was unfair from the beginning and common sense has to prevail.
Member Since September 2013 - Comments: 232
3:07 PM, 9th June 2016, About 10 years ago
If the BOI have any sense they will settle out of court and save themselves the court fees. Hoping
Member Since September 2013 - Comments: 232
3:10 PM, 9th June 2016, About 10 years ago
Are the West Brom just paying back the amounts they shouldn’t have taken or are they paying compensation too, that was on the table at one time. I guess this is difficult to calculate.
Member Since August 2015 - Comments: 9
3:16 PM, 9th June 2016, About 10 years ago
I think they will get compensation perhaps a percentage of their mortgages is the best way. How long will it take them to sort this mess out for them?
Member Since January 2011 - Comments: 12193 - Articles: 1395
4:35 PM, 9th June 2016, About 10 years ago
25 founder members already 😀 http://www.crowdfunder.co.uk/property118-action-group
.