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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11:51 AM, 23rd May 2013, About 12 years ago

I am a residential loan holder and have been fortunate enough to be one of those who have had the letter today from BOI reversing the interest rate increase.
As one of the class action members I have forwarded the relevant details to Justin.
It would appear to me there is still hope for some of the rest of you so keep the pressure up. I would urge anybody who has not yet signed up with Justin to do so, it certainly gave me peace of mind to know I wasnt acting alone. Ill stick with Justin for a while as I now have additional questions for BOI to answer and to add support for the rest of you.
Also many thanks to Mark for getting this campaign started in the first place, I cant believe BOI reversed this decision without such pressure, that I as an individual would simply not have been able to apply.

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15:33 PM, 23rd May 2013, About 12 years ago

Justin Selig
May I ask what your opinion is on the letters you have recieved from some of the 1200 borrowers ?

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16:58 PM, 23rd May 2013, About 12 years ago

John,

Really glad to hear that you are one of the lucky 1200.

Although this is no doubt a relief to you and you probably want to foget all about it now, do you think you have grounds to seek compensation from BOI for the stress they've put you through?

Also I've heard others mention that they've cashed in insurance policies etc. to pay for the monthly increases; if any of these individuals are also part of the 1200, then surely they have a legitimate basis to seek compensation?

Anyone any thoughts on this.

Mark Alexander - Founder of Property118

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20:16 PM, 23rd May 2013, About 12 years ago

A lady called me completely out of the blue earlier today to thank me for our efforts and to pledge to donate her refund of the overpayment to The GOOD Landlords Campaign which she will soon receive from the BOI.

This lady was Christine who commented her on 22/05/2013 at 10:41

Thank you for your kind gesture Christine. I am delighted you were one of the lucky 1,200 and we are very grateful for your ongoing support. Rest assured your money will be put to good use promoting the Class Action with a view to putting even greater pressure on the bank to reverse their decision to increase the tracker differentials for the remaining 12,300 affected borrowers.

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21:34 PM, 23rd May 2013, About 12 years ago

The banks are planning an UNPAID meeting over the bank holiday weekend to simplify mortgages and terms and conditions as from 31 October 2013.
1.Tricky Tracker Trotter: From 2% above BOE (depending on weather conditions)
2.Moving Fix: Between 4% to 9% for the term
3.Stable Variable: 8% stability for the term
Terms and Conditions will be open, very honest and definitely not misleading.
Clause 1.- The customer is allowed to redeem the mortgage before the end of term and the bank is allowed to recall the loan at any time by giving the customer 24 hours notice.
WARNING: PLEASE READ THE ABOVE TERMS AND CONDITIONS BEFORE SIGNING THIS AGREEMENT TO AVOID ANY FUTURE COMPLAINTS.

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21:36 PM, 23rd May 2013, About 12 years ago

Banks are planning another UNPAID meeting over the bank holiday to simplify SAVINGS as follows:
Secure savings: SPI (savings premium Insurance) will be between 3% and 9%.
Unsecure savings You can leave the money in the bank at your own risk. If your savings disappear, please do not blame the bank.
We advise all customers to choose the secure savings or keep their money under the mattress.

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12:20 PM, 24th May 2013, About 12 years ago

Mark
Just caught up with news of the BOI reversal letter and congratulations to all who received one. Alas we haven't but we think this news is encouraging for everyone else. Responding to and following on from FURTHER THOUGHT posted 21/5 11.10: I am assuming that everyone received, as we did, a signed letter from Des Crowley which quoted our Mortgage No. and was addressed to us specifically. This letter concerned the transfer of our BRT mortgage from BOI to BOI UK. In that letter Des Crowley promises that … “If the transfer is approved by the High Court and your mortgage transfers to Bank of Ireland UK, there will be no changes to the administration of your account, or the interest rate you currently pay”. This letter is dated 3 September 2010 and the tracker interest rate was obviously 1.75%. And - as I said - this letter is signed by Des Crowley, who was then, as he is now, a director of BOI. I think you could say that this letter definitely implies that the differential on the transferred mortgages would remain the same for the term of the mortgage, we certainly thought so. To partially quote you Mark, I can't see from a laymans perspective the difference between this letter and what's been said in the BOI Press Release. My wife and I are members of the class action and we would like to thank everyone involved.

christine in Hull

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12:58 PM, 24th May 2013, About 12 years ago

My product is F7A easyflex. BTL. My original loan was £25,500 in october 2003 and remained at this figure until 2007 when I increased maximum borrowing limit. I cant understand why BOI was prepared to use the 2007 loan figure and not the £25,500 figure. Now they have done a u turn on my flex mortgage, I will probably
jnever know the answer to this question.

Justin, my opinion on the letter I have received. It implies they have done a u turn for flex customers as a gesture of goodwill. In their veiw they claim they were right to change the differential. They are covering up their mistake/error to protect their own back.

Heather Ette

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13:16 PM, 24th May 2013, About 12 years ago

Mark/Justin
i emailed Jemma some weeks ago as i would like to join the class action but have not received a response. I have a problem however in that I do not have my original mortgage offer or conditions. I do believe though that I was on a fixed rate for 5 years which then reverted to a tracker at 1.75% above base rate for the term of the mortgage. Without my original documentation will it still be possible for my case to be taken forward as part of the class action?

I would still like to join regardless as I believe this is a shocking practice by the bank and they should not be able to get away with misleading their customers in this way.

michael murphy

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11:47 AM, 25th May 2013, About 12 years ago

Received second reply from BOI re Tracker rate ,still looking for paperwork regarding my complaint sent complaint early April they say it arrived 1st May,you can understand why they are losing money

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