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
Comments: 10
9:37 AM, 15th April 2013, About 13 years ago
I have just got back from holiday, is there a time frame to send my details and payment for the class action, hopefully I haven’t missed it. Can someone let me know.
Member Since January 2011 - Comments: 12193 - Articles: 1395
9:52 AM, 15th April 2013, About 13 years ago
@Colin Thody – yes, be quick though!
Member Since November 2013 - Comments: 18
9:59 AM, 15th April 2013, About 13 years ago
Am getting confused here. Do we have a case ? I haven’t heard any legal advice confirming that we do. It’s great that we can arrange for a class action but until counsel advises that we have a case how can people be contributing towards a class action ?? Justin’s initial advice was not positive after reviewing the clause.
I understand that BOI isn’t the first bank to have this clause and I believe this clause was used by Skipton and also Manchester building society to raise rates. The precedent has also been set and not by BOE.
Can we have definite confirmation that we have a case ?
Member Since November 2013 - Comments: 18
9:59 AM, 15th April 2013, About 13 years ago
Am getting confused here. Do we have a case ? I haven’t heard any legal advice confirming that we do. It’s great that we can arrange for a class action but until counsel advises that we have a case how can people be contributing towards a class action ?? Justin’s initial advice was not positive after reviewing the clause.
I understand that BOI isn’t the first bank to have this clause and I believe this clause was used by Skipton and also Manchester building society to raise rates. The precedent has been set and not by BOE.
Can we have definite confirmation that we have a case ?
Member Since June 2013 - Comments: 99 - Articles: 2
1:02 PM, 15th April 2013, About 13 years ago
In response to the various comments left over the weekend and also specifically to Denise2007, we are in the process of seeking Counsel’s opinion in relation to the best course of action for our case. The initial opinion has been kindly funded by Property118.com and we have asked people to send £100 plus VAT as a contribution towards obtaining the opinion and any excess will be used towards writing to the bank on behalf of the various borrowers. We have asked those who have asked us to represent them to send us copies of their documentation so we can review it. We have so far spend a great deal of time looking at the various different types of documentation (of which there are many) and speaking to borrowers without payment – which we are happy to do to get this off the ground.
Our opinion there is a case – but there may be more than one course of action available. We are seeking advice on the best course of action to take. The more people that sign up, the better as it spreads the cost among a larger pool of people, bringing the overall cost per person down.
Just one final qualification – contrary to what may have been reported earlier, the barrister we are using has not been personally affected by the BOI’s actions. He is an independent barrister who specialises in banking law.
I hope to update you again in the next couple of days. In the meantime we are responding individually to those borrowers who contact us directly.
3:17 PM, 15th April 2013, About 13 years ago
Seems very strange that mark alexander said on the 13th at 13:54 best of all the barrister was personally affected & Justin says he,s not???? are you now saying you have changed barristers now?
Member Since February 2014 - Comments: 43
3:47 PM, 15th April 2013, About 13 years ago
i am new to this forum , but i have just been in touch with the F.O.S and they have told me they will not be getting involved as the B.T.L is not regulated,i knew the F.S.A were not interested but that F.O.S already was looking at it for people already.?
Member Since January 2011 - Comments: 12193 - Articles: 1395
5:45 PM, 15th April 2013, About 13 years ago
@jacke – hands up, my mistake. Justin had another barrister who met him a few weeks ago, he was the one who is an affected borrower. I was mixing them up. Justin is using the banking barrister he first approached. Sorry for the confusion.
Member Since February 2014 - Comments: 43
7:58 PM, 15th April 2013, About 13 years ago
ive sent an email to the F.O.S asking them to confirm that they wont be dealing with my complaint just in case the person i spoke to was wrong. but if he wasn’t wrong then all those people hanging on in hope of that particular knight in shining armour coming to there rescue are waiting in vain,i was” banking” on them myself, and unsure about the class action at this stage but for me its time for some professional help.
11:38 PM, 15th April 2013, About 13 years ago
What I find most astonishing about this case is that btl was entirely unregulated and (other than by the law of the land) still is.
Are the fsa and fos similarly washing their hands of the issue on residential?