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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Mark Alexander - Founder of Property118

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18:36 PM, 16th June 2016, About 8 years ago

The Ruling against West Brom has little impact on the BoI case. This is because their T&C's are completely different. They will be very quick to pick up on those legal points and use them in their PR spin to try to put as many people off claiming as possible.

Please go ahead though, if only to prove what I am saying is right and to cost the BoI another £500 per complaint. Do bear in mind that £500 will line the pockets of FOS though! Which organisation do you detest most?

The basic principles are the same, a contract is a contract, and when we get to Court the Judges will judge on that basis. We mustn't compare apples with oranges though. The BoI contract is flawed for different reasons than the West Brom contract, even though the outcome will be the same for them both.
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Mark Alexander - Founder of Property118

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18:41 PM, 16th June 2016, About 8 years ago

Reply to the comment left by "Matt Jones" at "16/06/2016 - 18:29":

Please post your comment on the Mortgage Strategy website ...

"Contrary to the AMI Chairman’s statement most mortgage brokers that I have spoken to are delighted with the West Brom Court ruling as they believe that it restores confidence in the industry."
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Lucy McKenna

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19:51 PM, 16th June 2016, About 8 years ago

Can see why you are angry Mark. Unfortunately, cannot see your comment. Perhaps you have to be a member to see it.

M Jones

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20:02 PM, 16th June 2016, About 8 years ago

Reply to the comment left by "Mark Alexander" at "16/06/2016 - 18:36":

I do not detest the FOS Mark, far from it. I actually believe, perhaps naively, that they have the best of intentions. I feel however that they have a tendency, as is human nature, to follow the path of least resistance rather than that of 'right and wrong'. I think they are a little intimidated by the clout of the organisations that they are set up to police.
I take your point regarding 'apples and oranges' however having read the full judgement (over a glass or wine and with a smug smile I might add) I believe that there are certain parallels that can be drawn between the two cases.

Mark Alexander - Founder of Property118

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20:13 PM, 16th June 2016, About 8 years ago

Apparently all comments are "awaiting moderation"

Hopefully they will appear in the morning.
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Mark Alexander - Founder of Property118

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12:20 PM, 17th June 2016, About 8 years ago

Interesting media follow-up article ...

"West Brom landlords demand Fos re-open files"

Link http://www.ftadviser.com/2016/06/17/mortgages/west-brom-landlords-demand-fos-re-open-files-FRAR4OIOaLRlBVTVNJrfuK/article.html
.

Mark Smith Head of Chambers Cotswold Barristers

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12:36 PM, 17th June 2016, About 8 years ago

'Everything in moderation except moderation' Oscar Wilde

Mark Alexander - Founder of Property118

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12:41 PM, 17th June 2016, About 8 years ago

Reply to the comment left by "Mark Smith (Barrister-At-Law)" at "17/06/2016 - 12:36":

Hi Mark

Presumably you are referring to the Mortgage Strategy article?

The cheeky sods have amended the article because "allegedly" the AMI chairman never actually made the offending quote! Sadly they've only told me that on the phone, they haven't put it in writing and I didn't record it.

Apparently all related comments that were awaiting moderation have been deleted too!
.

Mark Alexander - Founder of Property118

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12:59 PM, 17th June 2016, About 8 years ago

I have posted the following on the "revised" Mortgage Strategy article.

Needless to say, my comment is "awaiting moderation" https://www.mortgagestrategy.co.uk/leader/

"I think it is very much in the interests of the industry that Property118 members are prepared to fight for their rights and hold mortgage lenders to account.

The despicable actions of West Brom caused a loss of faith in the mortgage industry, hopefully the win at the Court of Appeal will help to restore that.

Being a retired broker I would also like to point out that many people affected by the tracker rate hikes imposed by West Brom, and previously BoI wanted to sue brokers for not advising them correctly. They would have had a very good case if Property118 hadn't got the Court of Appeal to overturn the FOS and the High Court rulings.

I persuaded all affected borrowers to focus on the REAL rogues and to my knowledge not a single case of a brokers PI policy being attacked has been reported. Many started initial proceedings on exactly that basis but I talked them out of it and managed to redirect their anger to West Brom.

I hope to be able to do the same with the borrowers affected by similar injustice BoI, Skipton BS and Manchester BS. It is very much in brokers interests to support these cases too. If they don't, and if sufficient money isn't raised to take those lenders to Court, then the FOS rulings will stand and brokers PI policies will be at risk. The ambulance chasers will not stay parked forever!

Property118 Action Group are crowdfunding in order to raise the money necessary to fight these legal battles - please see http://www.crowdfunder.co.uk/property118-action-group - END QUOTE
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Tricia Collick

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7:32 AM, 19th June 2016, About 8 years ago

Hi Mark, looks like the fund is going at a reasonable pace, I keep watching it rising daily, it may encourage the doom merchants from the last time to get involved now the West Brom guys have done it !
Its a shame we had to rely on them but we should thank them wholeheartedly for their faith in you and the team.and send our congrats.
If the slow doubters don't get a move on and pledge they'll miss the chance to be a founder member and get left behind...

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