Bank of Ireland tracker mortgage % increase

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  • disposalist
    disposalist Posts: 54 Forumite
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    JimmyTheWig wrote: »
    Because that is how, I believe, the ombudsman will look at it if it is mis-sold.
    Ah I see - my apologies - I'm no expert and I didn't appreciate the definition of "mis-sold" there.
  • noddynoo
    noddynoo Posts: 346 Forumite
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    Historic averages are closer to 7% so 5 is hardly high. Borrowers have had it easy long enough at the expense of the prudent. I see this as just the start Bring it on! It is perfectly legal btw if you read the small print
  • noddynoo
    noddynoo Posts: 346 Forumite
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    plimsolls_on wrote: »
    Actually during the last 11 years I certainly have paid my share of interest.. it's not 4.49% that frightens me, its 8.49% or whatever, when BofE finally raises the base rate.. in the meantime, my tenant will bear the brunt as I will have to raise the rent to cover my costs as I cannot sell at the mo in Norfolk.

    You cannot charge the tenant more! :eek:
  • chucknorris
    chucknorris Posts: 10,786 Forumite
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    edited 28 February 2013 at 7:25PM
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    I can't really imagine a scenario where someone caught up by this rate change would be paying more than they did when they originally took the mortgage out (especially when taking inflation into account and looking at it in real terms). Have I overlooked something? I don't think they would maintain this larger margin (differential) when rates return to normal levels.

    These low margin tracker mortgages were pulled prior to (or around the time of) interest rates falling. So surely it is more of an end to the gravy train after 4 or more good years than sudden dire financial consequences. I do of course realize that it would have been an unpleasant surprise when opening the letter from your lender.
    Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop
  • cs1800
    cs1800 Posts: 21 Forumite
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    james_toney wrote: »
    Too many people never take into consideration things like this Graham, i am sure my friend is with the BOI i will ask him about it tomorrow.

    it is not fair though really,

    What really worries me is tomorrow you have to remember we now have a 4.49% differential so if base rates do return to the norm of 5% we will be paying 9.49% now that is really scary.
  • caveatvenditor
    caveatvenditor Posts: 85 Forumite
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    Anyone who can't afford this rate rise are, and have been, living above their means. You should have been making hay while blessed with abnormally low rates - then you might have stood a chance today.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    noddynoo wrote: »
    You cannot charge the tenant more! :eek:

    Then the property value need to fall to increase the yield.
  • chucknorris
    chucknorris Posts: 10,786 Forumite
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    edited 28 February 2013 at 7:39PM
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    cs1800 wrote: »
    What really worries me is tomorrow you have to remember we now have a 4.49% differential so if base rates do return to the norm of 5% we will be paying 9.49% now that is really scary.

    It is highly probable that there will be plenty of alternative mortgage products available that you could switch to at that time. Bearing in mind that when the base rate returns to normal levels the economy is likely to be in recovery. Or even that your lender would return the margin to a more acceptable level at that point in time.
    Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop
  • cs1800
    cs1800 Posts: 21 Forumite
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    disposalist wrote: »
    I'm in the same boat here and am now in the nightmare that is re-mortgage arranging - to be honest (since I'm not a professional landlord and an looking to sell the property) it's not going to be worth it for me given all the fees involved.

    I guess I'll just have to bend over and take it, though I will be using the Ombudsman to seek recompense of any costs and some compensation for the stress and ongoing rate differential if I do remortgage.

    I can only imagine that others are going to be much more badly effected - people that have mortgages on several properties based on the 'promise' of about 2% above BoE are probably getting their lives wrecked just about now.

    An advisor at BoI just mentioned to me that "the rates were up there a few years back - it's unwise to bank on rates staying low"... right, but if you'd wisely hedged against the interest rate rising with some other products then banking on BoI sticking to the arranged differential rate was essential part of a very wise plan that BoI just screwed by not holding up their part of the bargain.

    It's obscene how, when the public invest we are battered with the "investments can go down as well as up" 'advice' and expected to just take losses that arise, but when a bank makes an investment (selling mortgages), if it doesn't work out well, they just screw their losses out of their customers. It really shouldn't be legal, should it?

    A lack of taking on financial responsibility is what lead banks like BoI to cause their own problems in the first place and now when they are not making money and being forced to take (costly) measures to protect themselves WE have to pay for it?!

    Anyway - I'm ranting... sorry.

    I have written to the Ombudsman, BBC Watchdog, Moneybox, Guardian Money etc. and I advise everyone to do the same.

    This sort of 'bad behaviour' (to put it lightly) by banks CAN be discouraged or even reversed or compensated for later IF people stick together.

    I can see you have written to a lot of people but to be honest you missed the most important one I have just written to Crime watch
  • ILW
    ILW Posts: 18,333 Forumite
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    cs1800 wrote: »
    What really worries me is tomorrow you have to remember we now have a 4.49% differential so if base rates do return to the norm of 5% we will be paying 9.49% now that is really scary.
    Nothing new though, I remember being thankful when my mortgage hit single figures.
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