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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8:23 AM, 25th September 2013, About 11 years ago

Reply to the comment left by "michael murphy" at "25/09/2013 - 08:17":

No worries Michael, I didn't even check your maths, I was up working very early this morning so same excuse mate LOL

It was more the principles I was commenting on and you are right so thanks again for raising the point.

Richard Kent

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14:46 PM, 25th September 2013, About 11 years ago

Reply to the comment left by "michael murphy" at "25/09/2013 - 08:17":

Hi Murf,

Assuming you're not VAT registered and you are in the 20% tax band you would receive tax relief on the £180 (inc VAT), That being £36.

The legal costs would be treated as an Allowable Expense.

Having expenses lowers your tax liability but you have to incur the expense for you to receive the tax relief.

Therefore you are much better not to incur the expense in the first place if you see what I mean.

I hope this helps.

Mark Alexander - Founder of Property118

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15:02 PM, 25th September 2013, About 11 years ago

Reply to the comment left by "Richard Kent " at "25/09/2013 - 14:46":

Thanks for that Richard!!!

So are you advising Richard not to get involved and to support the campaign?

That's not very nice is it?

That being the case, which of the lenders is paying your salary?

Let me guess, you don't have a tracker mortgage either and you don't care a jot about anybody who does?

Do you really support the mortgage lenders profiteering?

Or am I completely missing the point you are trying to make and over-reacting here?

Richard Kent

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16:11 PM, 25th September 2013, About 11 years ago

Reply to the comment left by "Mark Alexander" at "25/09/2013 - 15:02":

Hi Mark,

Sure, It's easy to miss the point in written text unless the writer conveys the context.

In my case I was referring to expenses generally speaking.

I am in full support of anyone contributing to the legal action and I would do the same were I in that position.

Personally I think the case against BOI is winnable as their paperwork is sloppy and inconsistent. They have indirectly confirmed that by reversing some of the hikes and in those cases the paperwork was inconsistent.

I hope this clarifies things.

Richard Kent

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16:17 PM, 25th September 2013, About 11 years ago

Reply to the comment left by "Mark Alexander" at "25/09/2013 - 15:02":

P.S and we can now see that other lenders are duplicating the BOI actions as we both feared and predicted they might in the very early stages of this post many months ago.

Mark Alexander - Founder of Property118

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16:19 PM, 25th September 2013, About 11 years ago

Reply to the comment left by "Richard Kent " at "25/09/2013 - 16:11":

Hi Richard

I am so glad you cleared that up, you had me worried for a minute - PHEW!!!
.

mrs sharp

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11:53 AM, 26th September 2013, About 11 years ago

From the BBC websiteClydesdale and Yorkshire Bank fined for mortgage errors

Clydesdale Bank Customers were told of the errors in 2010 but the regulator says their rights were not made clear ......

More here http://www.bbc.co.uk/news/business-24282800

ian

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8:15 AM, 27th September 2013, About 11 years ago

To attract any investors they need the possibility of a good return, If £100k was raised & we one our case, claim the £100 back on expenses, that's break even for investors,
Then if Justin wins say 500 no win no fee's ,from his profit of each case give £100 to investors for interest £50k thats 50% return on there investment, if he wins 1000 cases !00% return & so on.

David Ellis

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9:31 AM, 27th September 2013, About 11 years ago

I have only recently come into this forum as I have 1 tracker mortgage with the WBBS which is increasing by 2% from 1st December 2013 which will move my monthly payment by an extra £250PM. On top of that I have 2 other larger buy to let mortgages with Mortgage Express and reading the comments left by other members it sounds as if it is only when and not if they also increase rates. This could then leave me paying suddenly about £1,000 extra a month in total on my three buy to let properties. I am only a very small buy to let investor who got into it as a pension which hasn't worked out, so goodness knows what some of the larger landlords will be paying if all buy to let lenders increase rates.
Now I think B of I increased rates back in February 2013 and now WBBS last Saturday. Firstly I hope all members of our forum have written complaining to B of I and WBBS where appropriate and the Financial Ombudsman Service of their unlawful increase in rates. Secondly I think I have read somewhere in this forum or that of the WBBS that the Financial Conduct Authority and the Trading Standards etc are not interested in getting involved here as buy to let mortgages are not regulated?. If this is so, we must have a test case in court with one of these lenders asap so it can be decided by a judge if it is legal what these two lenders are doing and probably soon the rest. Now it is some 8 months since B of I raised rates and we clearly don't know how much we need to raise and how much we need to pay each. Could Justin price up the worst scenario for us with regards rough costs and that is on the worst scenario e.g being referred to a higher court and also us losing the case and having to pay costs. Puting this into perspective as mentioned above I am only a small buy to let investor but I soon could be paying an extra £1,000 PM in interest payments. I haven't currently got a spare £1000 lying around but as a crucial need I could raise £1,000 on my credit card. I am not VAT registered so I don't understand why we are talking plus VAT all the time on our contribution? Anyway if for example 500 people paid £1,000 each that would give us a fund of £500,000. It would be better obviously if 1,000 paid £500 and so on.
Has anyone thought of writing and complaining to our local MP. If we had a lot of people across the country doing this it might be raised in parliament?

Geoff H

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9:40 AM, 27th September 2013, About 11 years ago

Having already been effected by the BOI rate hike I am unfortunate enough to now have a letter from West Bromwich as well. The West Bromwich rate for my BTL mortgage is increasing from 2.49% to 4.49% with effect from 1 December. West Bromwich sum up their justification as follows:-
"We have a duty to manage our business prudently in all market conditions. The terms and conditions of your buy to let mortgage were designed to ensure that we could carry out this duty, hence our right to make this change."
Regarding a Class Action and fees etc I have made payments to Justin's organisation with respect to BOI. With this second contender to deal with now should I be re-registering on the form at the lead in to this thread?

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