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 September 2013 - Comments: 333
8:26 AM, 12th March 2013, About 13 years ago
@Roseal,
I doubt an unscrupulous bank like the BOI is unlikely to reverse this as a matter of fairness.
The supposed basis on which they introduced it on face value seems valid but many mortgage advisors know this is the BOI’s way of getting many borrowers off their books.
Please do not expect voluntary fairness from this bank.
8:37 AM, 12th March 2013, About 13 years ago
@Roseal
Just wondering roseal when did you receive your letter from BOI stating the rise in your mortgage?
Member Since September 2013 - Comments: 333
12:47 PM, 12th March 2013, About 13 years ago
You will see that the BOI does not believe in ‘Debt Forgiveness’
Please see here:
http://www.irishtimes.com/news/boi-has-no-debt-forgiveness-policy-1.711873
They do however believe in forgiving themselves for performing badly and trying to remedy the problem at the borrower’s expense.
Member Since September 2013 - Comments: 333
12:54 PM, 12th March 2013, About 13 years ago
And now you will see the BOI backtracking due to the backlash:
“The Bank of Ireland has now confirmed that a number of customers affected by the rate rise have been offered £1,000 to leave the lender.”
Here:
http://www.mortgagesolutions.co.uk/mortgage-solutions/news/2254100/bank-of-ireland-customers-offered-gbp1-000-to-leave-lender
This could indicate the BOI feel that they are in a vulnerable position.
Member Since June 2013 - Comments: 1121
1:21 PM, 12th March 2013, About 13 years ago
Richard they offered me £5000 each on two properties in Grantham with high loan to value ratios so it would have meant pumping money in to get them down to a remortgageable level. They had the small print that meant they could not increase the differential. The property they have increased had the small print where they could- or think they can. So they offer me money on properties where they knew they could not force an increase. How cynical and underhanded is that? Or is that how BOI do their business these days.
Comments: 10
1:27 PM, 12th March 2013, About 13 years ago
Can anyone let me know if they have received an offer of a payment to move their mortgages since the BOI’s scandalous decision to more than double the tracker rate. Any info would be useful, thanks.
Member Since September 2013 - Comments: 333
1:44 PM, 12th March 2013, About 13 years ago
@Gary,
I agree, I’m one of their customers and I know how they operate.
I have dealt with them on a number of occasions and would describe their attitude and arrogance as beyond belief.
I offered them the chance to avoid an FOS complaint but they arrogantly refused as they were certain they had the upper hand. Unfortunately for them I kept paperwork dating back till 2010 to prove my case.
Their position is looking very uncertain now.
Member Since September 2013 - Comments: 333
3:37 PM, 12th March 2013, About 13 years ago
@Colin Thody,
Colin, it looks like you might have to telephone BOI and quote this link:
http://www.mortgagesolutions.co.uk/mortgage-solutions/news/2254100/bank-of-ireland-customers-offered-gbp1-000-to-leave-lender
Member Since July 2013 - Comments: 89
3:39 PM, 12th March 2013, About 13 years ago
Colin, See my earlier post 1/3/13. I was offered £6000 then £8500 on 4-5 of my properties. But at no time was ever informed of Bank of Irelands future plans with this rate rise.
3:39 PM, 12th March 2013, About 13 years ago
@Gary
Hi Gary, the 2 Mortgages that you were offered cash back on were they post or pre 2004? also the 1 Mortgage that they increase the rate on was that post or pre 2004?
Thanks