Bank of Ireland increase differential on tracker rates

Bank of Ireland increase differential on tracker rates

10:32 AM, 28th February 2013, About 12 years ago 1862

Text Size

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?


Share This Article


Comments

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

17:11 PM, 3rd March 2013, About 12 years ago

I am a bank of ireland buy to let mortgage customer - but still havent received a letter. I am willing to contribute to a "class action" fund to stop them invoking this unfair clause and sue them for costs and damages.This outrageous behavior totally undermines the meaning of tracker mortgages ie "fixed" differential over base rate.

Ian Hamilton

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

17:39 PM, 3rd March 2013, About 12 years ago

Just a quick question to those that were offered cash back from the BOI.
How did they come to the figure you were offered. Was it a fixed sum or a percentage of your outstanding borrowings? TIA

Richard Kent

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

18:39 PM, 3rd March 2013, About 12 years ago

@Gavin,
As most of your comments are fundamentally wrong and this forum is not a platform to make matters worse for those people affected I choose to make no further comment to you.

Richard Kent

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

18:42 PM, 3rd March 2013, About 12 years ago

@Mary,

Mary, did you enter into contract before 2004?

If not as far as we can tell, it will not affect you.

Richard Kent

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

19:20 PM, 3rd March 2013, About 12 years ago

@Gary Smith

I'm sorry to hear you are one of the affected BOI customers.

I too am one of their customers and have lodged an FOS complaint for another reason.

Let's say I know what sort of service, or lack of it, to expect from the BOI.

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

19:43 PM, 3rd March 2013, About 12 years ago

My residential loan offer states the following:

Quote:
16. a. This condition applies to product H4BM. From the day we make the loan the interest rate we charge will
track the base rate for the entire mortgage period at a fixed differential of 0.89% above base rate unless we
change the differential under 6(m) of our Residential Mortgage Conditions.
then later of just before the signature

Quote:
APPLICANTS ACCEPTANCE:
I/We have received, read and understood your (1) product brochure for the mortgage described in this Offer, (2)
Scale of Fees leaflet, (3) Notes for Mortgage Applicants leaflet and agree to the General Consent to transfer in
section 3 or Notes for Further Loan Applicants if this is an Offer of Further Loan, and (4) Guarantor's Guide (if applicable).

I strongly suspect that the document "Residential Mortgage Conditions" wasn't actually issued. Is the same document referenced on the BTL loan offer? If so does anyone actually have one?

Mark Alexander - Founder of Property118

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

21:46 PM, 3rd March 2013, About 12 years ago

Casting aside a few daft comments from people who really don't understand the issue here I am extremely pleased at the progress of this thread today and very much looking forward to my legal contacts adding their advice in the coming weeks.

What we need to do now is let as many of the 14,000 affected BOI borrowers know about this thread and encourage them to follow progress too. They can do this by leaving a comment or subscribing to comments by adding their email address in the section just below the main article.

Everybody following this thread can help too by sharing a link to this article via social media, e.g. Facebook, Twitter, LinkedIn, blogs, comments sections on other websites and of course other forums. Also, please try to get your local media involved. They will all be looking for stories of how people are affected by this, especially people like Lee who stand to lose £1,750 a month BEFORE we even get a rise in bank base rates. The media will also be interested to hear how home owners are affected and why it's not as easy as it sounds just to refinance. Please ask all media to link back to this thread from their websites and at least mention it in the newspaper, radio or TV coverage.

Thank you to all who have left constructive comments and support so far.

Fed Up Landlord

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

21:46 PM, 3rd March 2013, About 12 years ago

Hi all. Just withdrawn all funds on deposit from the Post Office administered by the BOI. And been posting how BOI do there business on mortgage website forums. This will begin to hurt if we all start to do it.

Those of you who know how to manipulate social media. Tell us how to get the story out so we can have the most impact.

Mark Alexander - Founder of Property118

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

21:56 PM, 3rd March 2013, About 12 years ago

@Gary and all - if you share to Facebook you will see that there's an option to promote your post. You can share to any Facebook wall of a friend or group you subscribe to. If you select "promoted post" (bottom right of the shared post) you will see two options, choose the second one "people who like your page and their friends" then select a budget. The post will then be shared to the Facebook wall of all friends and their friends. Just suppose you have just 200 friends on Facebook and they each have 200 friends you could reach 40,000 people. If just 50% of the people who have commented here do this we will soon reach most of the UK population and it's a VERY cost effective way to do so.

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

21:57 PM, 3rd March 2013, About 12 years ago

I've started a thread here
http://forums.moneysavingexpert.com/showthread.php?p=59738527&posted=1#post59738527
I have two 2001 BTL B&W base rate tracker mortgages now with BOI. Not yet received the dreaded letter from BOI.
We took out out a further advance on one in 2008.
The 2007 conditions booklet for that advance (6m) says - 'We may reduce a positive differential or increase a negative differential at our discretion by giving you not less than 7 days written notice. This means we can change the differential in a way that is favourable to you'
(6j) states 'Unless we change the differential (if any) under condition (6n) we will not change the tracker rate unless the base rate changes'
In other words its tracking base rate.
Condition 25 says 'Changes to these conditions. We may change any of these conditions at any time by giving you not less than 30 days notice in writing as long as the change is favourable to you'.
So if this booklet applies to our original mortgage advances then we are OK. But guess what we cannot find a booklet for the original advances in 2001.
It would seem from other forums neither can anyone else!
Also it's not on the list of other docs as listed on the mortgage offer.

People have even asked their solicitors for the document to no avail.
So it would seem BOI are trying to move the goal posts on justification of a
mortgage terms & conditions document that no one was given !

Has anyone been able to find this document namely Mortgage terms & conditions for their pre 2004 B&W tracker mortgage ?

If they have been transparent & open as is required of them, then how come no one was aware of this possibility of a hike in the differential ?
After all who would knowingly take a out a tracker mortgage that one day would in effect become a non tracker?
A tracker mortgage does not have two variables. It only has one variable namely the bank of England base rate.
If they try to increase the differential from 1.75% to 4.5% then it's surely another case of miss selling.
Because clearly it's wasn't what it said on the can which is 'base rate tracker mortgage' when BOI are now trying to make them infinitely variable mortgages!

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 187

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Automated Assistant Read More