Bank of Ireland increase differential on tracker rates

by Readers Question

10:32 AM, 28th February 2013
About 6 years ago

Bank of Ireland increase differential on tracker rates

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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.

The deadline for submission of instructions has now expired. However, it may still be possible to join the representative action subject to paying Court fees and an additional cost to cover associated administration. For details please email :


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:


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?


14:17 PM, 28th February 2013
About 6 years ago

I have complained to the ombudsman...its very easy and took 5 minutes over the phone. I advise everyone aggrieved to do the same.

Neil Patterson

14:23 PM, 28th February 2013
About 6 years ago

Hi Rick,

Have you also followed the bank's complaints procedure as they are allowed 2 attempts to answer your complaint before it goes to the ombudsman.

This way you know it will be dealt with seriously and tie the Bank up in paperwork. I fear if you go straight to the Ombudsman they will just redirect you to the bank in the first instance.

If not great but I would do both to be sure.


14:28 PM, 28th February 2013
About 6 years ago

I have a BTL bristol&west mortgage that is now bank of ireland, my fixed rate deal came to an end in Dec 2012 and im now on SVR which is 2%+base. Is this problem only applying to people on tracker deals or also people who are on SVR? I have not received any letter as yet.

Neil Patterson

14:28 PM, 28th February 2013
About 6 years ago

Also while I am on my hobby horse.(no pun intended Tescos)
Lee made a comment that the Bank said they had checked what they are doing with the FSA.
Wrong! The FSA do not regulate BTL loans as they are deemed commercial transactions not personal. Although the FSA do regulate banks overall soon to be the Bank of England.

14:32 PM, 28th February 2013
About 6 years ago

Hi Neil
Yes, I have also complained to the BofI. They also gave me the line that its been cleared by their legal counsel and the FSA. Is this the govts way of having a go at landlords now?

Neil Patterson

14:34 PM, 28th February 2013
About 6 years ago

Hi Rob
SVR can be changed at any time at the bank's discretion unfortunately, so I would expect this to be increased as it is legally and politically far easier for them. 2% over base as an SVR does sound low though, have you recently checked what you are paying?


14:35 PM, 28th February 2013
About 6 years ago

Is it possible you could claim the mortgage was mis sold to you by bank of ireland or you broker on the basis that you were not aware of this rule,and this particular condition was not brought to your attention or fully explained when you applied? Worth a try maybe!


14:41 PM, 28th February 2013
About 6 years ago

Hi Neil

Sorry its not SVR, the mortgage conditions just say at the end of my deal (Dec 2012) i go onto 2% plus Base rate for the remaining term of the loan. I guess from the look of things they can just change anything! Hopefully they wont change this.

Mark Alexander

14:48 PM, 28th February 2013
About 6 years ago

Forget mis-selling as an angle, the sale of buy to let mortgage products isn't regulated. However, the banks are regulated by the FSA and one of their principles you could quote is "Treating Customers Fairly"

Alistair Nicholls

15:54 PM, 28th February 2013
About 6 years ago

I agree with your understanding. There was no +ve or -ve differential, so under their terms they cannot reduce or increase it. It didn't exist!

All complain to Ombudsman & to BoI and then organise a class legal action not only to enforce current contract, but also to see to obtain damages for costs & administrative waste of time

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