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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Offsetting property income tax - READERS QUESTION
Member Since August 2014 - Comments: 5
7:49 PM, 25th May 2013, About 13 years ago
justin and ian. I apologise for not reading ian’s question properly.
Member Since June 2013 - Comments: 1121
12:18 PM, 27th May 2013, About 13 years ago
Is it just me or are BOI insistent on shooting themselves in the foot?
Just had may annual mortgage statement for my affected property. On this property I have one mortgage from 2003 ( the primary advance) which is affected, and a “further advance” from 2005 which is not affected – because there is no mention of the dreaded “differential” in the terms and conditions.They have “lumped” both accounts together in one mortgage statement and drawn no distinction between the two. This is what it says in the “explanatory notes:
“From time to time we recalculate your mortgage repayment, for example, when there is a change in the Bank Of England Base Rate. The interest charged on each monthly mortgage payment is calculated on the total amount you owe us”
So BOI, can I have the example please of recalculation because there has been a change in the BoE base rate? And while your at it can I have my mortgage interest calculated at 2.25% ON THE TOTAL AMOUNT I OWE YOU!! rather than 4.99% on one and 2.25% on the other?
Sending this off to Justin – I assume everyone else will get the same. How misleading is this?
Member Since July 2013 - Comments: 264
1:56 PM, 27th May 2013, About 13 years ago
Gary SCN
Interest rates have,nt ,moved since 2009. They are last years interest statements, unless you have got next years statements in advance then you have been charged 2.25% on the total amount you owe?
Member Since June 2013 - Comments: 1121
2:51 PM, 27th May 2013, About 13 years ago
Ian,
I am fully aware that these are last years statements as they have got last year on them!
The point I am trying to make is that the messages being sent in the explanatory notes appear completely at odds with what has happened, and adds further fuel to the fire. This was the same explanatory note I had last year – and what did BOI do – that’s right- increase the interest rate this year.
11:25 AM, 28th May 2013, About 13 years ago
I have interpreted the ‘standard letter’ as one I received in 2010 relating to a ‘Deed of Variation’ I was asked to sign relating to the easyFlex feature of my mortgage. Far from being ambiguous, it very clearly stated that my mortgage T&C’s were being changed to the 2009 version which omitted the killer ‘clause n.’
Member Since January 2011 - Comments: 12193 - Articles: 1395
10:52 AM, 1st June 2013, About 13 years ago
UPDATE
I’ve had a few people contacting me to ask why this thread has gone a bit quiet.
Well hopefully no news is good news.
Justin has been on holiday this week and the submissions to the were sent prior to his departure. It’s very reasonable, given the size of the submission, to expect it to take at least a couple of weeks to get a response.
Member Since July 2013 - Comments: 186 - Articles: 2
9:09 AM, 2nd June 2013, About 13 years ago
http://www.thisismoney.co.uk/money/mortgageshome/article-2334365/Financial-Ombudsman-set-rule-tracker-mortgage-storm.html
Member Since January 2011 - Comments: 12193 - Articles: 1395
11:58 AM, 2nd June 2013, About 13 years ago
Thanks for the link Rob, I have left a comment there in the hope that it will bring more affected borrowers into the Class Action.
12:26 PM, 2nd June 2013, About 13 years ago
Mark
Why are the comments posted not coming on? it seems to be stuck on 714 with Simon Glover which also has,nt appeared.
Member Since January 2011 - Comments: 12193 - Articles: 1395
12:30 PM, 2nd June 2013, About 13 years ago
Hi Jackie, I don’t know, they are showing but we seem to be having a few Gremlins following an update we ran on Friday. Reported to IT as an urgent fix for tomorrow morning