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

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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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Paul Brindley

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18:33 PM, 9th February 2014, About 11 years ago

Reply to the comment left by "Colin Childs" at "09/02/2014 - 15:47":

Colin, the banks have an attitude of we will win any battle on a legal level as 'we are a big conglomerate with long pockets and are only fighting the small man who frankly we will grind into the dust, regardless of what is right or wrong, bolstered by a thought that they can do what the F they want regardless of what any government or its weak regulator would want us to do because they too are puny. It is not the world I am happy passing on to my kids. If I choose not to take these bullies on it is because of my own weaknesses. Nothing more. My Dad fought the Germans on that basis. And anyone who chooses not to stand up to bullies deserves that they and their kids be trampled. And that is why we have to bury them. If it were our fathers they would have fought, the fact my generation has had it easy means we prevaricate. It comes down to knowing the difference between right and wrong and standing up for it. I let my family line down, who passed us this easy world, if I don't stand tall.

Colin Childs

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19:25 PM, 9th February 2014, About 11 years ago

Reply to the comment left by "Paul Brindley" at "09/02/2014 - 18:33":

There's much I could say in response to your diatribe from a personal perspective. Though I will refrain as has absolutely no relevance to the debate. Once you allow something to become personal then there's an inherent danger that judgement becomes clouded. Emotion rules the head.

As I've said before and will repeat endlessly. There's a game in play at a far higher level. So matters have to be considered on a case by case basis. One size does not fit all. So getting the real facts into the open is the key. Only then can an informed judgement be made.

Paul Brindley

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19:50 PM, 9th February 2014, About 11 years ago

Colin, I have said nothing personal, you have chosen to take it so.

GHH 64

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20:40 PM, 9th February 2014, About 11 years ago

Folks

To get back to the main issue .. I have pasted extracts from the EC approval of State Aid for Bank of Ireland
Anyone know Nigel Farage - if an EU hand can be seen in the current situation it would be great electoral ammunition in May!

The devious thought which occurs to me is ask whether buy to let mortgages have been reclassified within BOI as 'business banking' & therefore subject to the deleveraging conditions below?
Note 135 re structurally loss-making business in the medium term
179 - highlights that bulk of this deleveraging will be in UK

how better to deleverage than by driving away existing customers?

You might also note the comments about the BOI/Post Office relationship

As regards the deleveraging of the balance sheet the Commission notes positively the specific measures envisaged by the restructuring plan.
(133) The second restructuring plan indicates that BOI will significantly restructure its UK business. As detailed in Annex I (Appendix I therein), BOI will continue the run-down of its UK Intermediary Mortgage Portfolio, therefore withdrawing from the intermediary sourced mortgage market there. Additionally, BOI will sell its Asset Finance (Burdale), International Project Finance and US Real Estate businesses. BOI will also significantly reduce or completely run down its Corporate Loan Portfolio, UK Corporate Banking Portfolio and UK Business Banking Portfolio. Total deleveraging will be of EUR [...] billion since December 2010, including EUR 10 billion in sales.
(134) BOI has strengthened its retail position in Great Britain by incorporating in a UK subsidiary centred on its relationship with the UK Post Office. The subsidiary provides an important access for BOI in the large UK deposit market, and operates on the basis of a prudent LDR not exceeding 100%. In that context, BOI may transfer part of the assets earmarked for deleveraging to its subsidiary, provided that the 100% LDR is complied with.
(135) Those restructuring measures also illustrate that, as envisaged by point 12 of the Restructuring Communication, BOI's plan is mainly based on internal measures and includes withdrawal from activities which would remain structurally loss-making in the medium-term.

(i) Reduction of BOI's market presence (178) BOI will reduce its balance sheet and its market presence through the divestment of several of its businesses and the restructuring of its UK business, including the run-off of several UK loan portfolios as described in detail in Annex I. The plan envisages a reduction of the balance sheet of [...]% from March 2009 to December 2015 and a RWA reduction of [...]% over the same period. The additional deleveraging to the first restructuring plan (balance sheet reduction of [...]% and RWA reduction of [...]% over the 2009-2014 period) is significant.
(179) The bulk of BOI balance sheet reduction will be in the UK and international markets. BOI will not reduce its balance in Ireland significantly, notwithstanding its high market share in that country. As explained above, that limitation is due to the necessity to continue providing credit to the Irish economy and to the lack of potential buyer or new entrants which could take the place of a reduced BOI in the Irish markets in the short-term.

Mark Alexander - Founder of Property118

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17:57 PM, 10th February 2014, About 11 years ago

SECURE FORUM LIVE

All paid up members of the legal campaign should now have received an email from Justin with a link to the secure forum.

If you have NOT received this email please check your spam/junk folders and if it is still not there please inform ana@lawdepartment.co.uk
.

ian

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14:19 PM, 11th February 2014, About 11 years ago

Mark
Are you able to give us an update on how much money that has been raised so far towards court case ?

Mark Alexander - Founder of Property118

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14:36 PM, 11th February 2014, About 11 years ago

Reply to the comment left by "ian " at "11/02/2014 - 14:19":

No but Justin can and that announcement will be via the secure forum 🙂
.

ian

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14:32 PM, 12th February 2014, About 11 years ago

On Mortgage Strategy
Post Office is re-entering Buy to Let market loans at 2.98% funded by BoI

Mark Alexander - Founder of Property118

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14:47 PM, 12th February 2014, About 11 years ago

Reply to the comment left by "ian " at "12/02/2014 - 14:32":

I had to see it to believe it but here's the link >>> http://www.mortgagestrategy.co.uk/news-and-features/sectors/buy-to-let/buy-to-let-news/post-office-re-enters-buy-to-let-market/2006590.article

Some choice comments will be left on that forum I hope!
.

Lucy McKenna

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15:21 PM, 12th February 2014, About 11 years ago

Reply to the comment left by "ian " at "12/02/2014 - 14:32":

then why are they charging existing borrowers 4.49? Someone should warn the Post Office customers it won't last. Before someone suggests it I am so sorry I can't embarrass my family by standing outside a post office with a placard. There must be another way............

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