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?
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Member Since September 2013 - Comments: 35
12:42 AM, 17th October 2013, About 12 years ago
I feel like a bit of an intruder on this forum as I am in N Ireland and have a single residential mortgage with Bank of Ireland for my home. Am I alone on these two counts??
Member Since September 2013 - Comments: 232
10:06 AM, 17th October 2013, About 12 years ago
No Mark it is not just you and Gary out there. I think it must be the holiday season, we have been away and only just back. Must say I do feel a bit hijacked/neglected by the WBBS but am looking forward to the BOI getting going again. Many thanks for all you do. L.
Member Since January 2011 - Comments: 12193 - Articles: 1395
10:20 AM, 17th October 2013, About 12 years ago
Reply to the comment left by “LucyM ” at “17/10/2013 – 10:06“:
I feel your pain Lucy but I do have some good news.
In the last few days, 45 people who have completed the Class Action Expression of Interest form have confirmed they are affected by the Bank of Ireland.
It is without doubt the pro-activity of the members of the West Brom group which has flushed these people out and and we appear to be gaining momentum. On that basis we should be able to re-start the fundraising for the Bank of Ireland Class Action. In the meantime, I can assure you a lot of unpaid work is going on behind the scenes, especially by Justin Selig and the barrister he employed. We even have a QC reviewing the Counsels opinions of both side for free at the moment. I suggest we milk this generosity of our professional advisers. Clearly they spot an opportunity further down the line otherwise they wouldn’t be doing this. All of the above leads me to believe that our legal team still believe we can win and that they also have faith in the marketing we are doing to attract further interest.
.
Member Since September 2013 - Comments: 232
11:20 AM, 17th October 2013, About 12 years ago
Reply to the comment left by “Mark Alexander” at “17/10/2013 – 10:20“:
Thanks Mark, I had sort of worked out that WBBS was a good thing but it is very reassuring for me and I imagine for others to hear it from you and especially to hear that people are still interested in joining BOI . Best L.
Member Since September 2013 - Comments: 35
10:00 PM, 20th October 2013, About 12 years ago
Just heard about this happening in South of Ireland (not North of Ireland where I am) but interesting all the same:
http://www.youtube.com/attribution_link?u=%2Fwatch%3Fv%3DiQFFK20wOD0%26feature%3Dshare&a=F0rkSTYqDZo9DSL0jkaLcw
Member Since July 2013 - Comments: 264
4:21 PM, 21st October 2013, About 12 years ago
Reply to the comment left by “Theresa McAllister” at “20/10/2013 – 22:00“:
Interesting vid shows what can be achieved when you unite,
Member Since November 2013 - Comments: 85
12:22 AM, 2nd November 2013, About 12 years ago
I am helping someone, an individual as opposed to a btl investor, who’s in the same predicament as you guys. If you look at the Bank of Ireland website and pick up on the investor section, you’ll see a presentation by their board of their 2012 accounts. If you look hard you’ll see a reference to them increasing the differential on UK residential mortgages by 1.5 per cent in the period but only by 0.5 per cent for their Irish equivalents. Surely if their argument is that they are increasing the differential to rebuild the bank’s balance sheet, by favouring ‘their own’ to the detriment of UK borrowers, expecting UK borrowers to subsidise Irish borrowers, they have negated their argument and should not increase the UK at all? What happened to race discrimination laws?
Member Since July 2013 - Comments: 264
9:26 AM, 2nd November 2013, About 12 years ago
Reply to the comment left by “Paul Brindley” at “02/11/2013 – 00:22“:
Hi Paul
Where they tracker accounts & doe’s it show how many where affected?
Member Since September 2013 - Comments: 232
10:19 AM, 2nd November 2013, About 12 years ago
Reply to the comment left by “Paul Brindley” at “02/11/2013 – 00:22“:
Hi Paul, I would really like to read this. Have had a quick look to no avail. In a rush this weekend so is it possible you could
post the link to the relevant bit. Thanks. L.
Member Since November 2013 - Comments: 85
10:23 AM, 2nd November 2013, About 12 years ago
http://bit.ly/HkWJG7
This is the link to the Bank of Ireland’s presentation it gave in February 2013 on its accounts to December 2012. Everyone here, without exception, needs to know the key points of these. And look out for the next set of accounts coming out. And assess what it says there. Look at pages 13, 19, 22, 24, and 41 in particular. Page 19 shows that in the year to 31 December 2012 the Bank of Ireland increased its differential on UK resi mortgage holders by 1.5% but only increased the differential on its Republic of Ireland borrowers by 0.5%. This is despite the fact that the UK mortgage book is cleaner than the ROI mortgage book. That’s to say UK borrowers are being forced to subsidise the rebuilding of the Bank of Ireland out of all proportion to the ROI borrowers. Or at least that is my reading of it (I’m a fellow of the Institute of Chartered Accountants in England & Wales and licensed insolvency practitioner so should know when someone is being shafted, and quite clearly you guys are here). So even if you lose the argument over the bank’s ability to increase the differential, you have a strong argument that you are being asked to pay far more than in fairness you should. My advise is to make this a 2 step argument with BOFI – the second step is make them prove the rise is appropriate and fair – and I don’t think it is. What we have here is a foreign bank trying its level best to charge people outside of its country of origin for problems that lie within its origin. Why oh why the FCA or FOS haven’t seen this I don’t know. It’s so blatant!