MSE News: Bank of Ireland to raise mortgage SVR

jjbell7

i seen a mortgage broker today as i'm going to leave BOI, he suggested going for the best fixed rate over 2 years instead of a tracker in the current climate of svr rate rises. i'm going to shop around some more and get more advice. anyone on here had broker advice they would like to share or just their own thoughts on what to do in this situation, thanks

GMS

jjbell7 wrote: »

i seen a mortgage broker today as i'm going to leave BOI, he suggested going for the best fixed rate over 2 years instead of a tracker in the current climate of svr rate rises. i'm going to shop around some more and get more advice. anyone on here had broker advice they would like to share or just their own thoughts on what to do in this situation, thanks

You want out of BofI as they have raised their SVR. Would you not be better going on to a longer term fixed than 2 years to prevent any rises for longer?

jjbell7

sound advice, thanks. i did mention it to advisor but he suggested 2 year fixed but didn't fully explain why. i think everyone is just guessing what may happen. may try a couple more brokers to get a more rounded view, i'm not panicing just yet

GMS

In 2 years time lender rates are likley to be higher than today. Whether B of E rates have risen by then is anyones guess.

Look at 3, 5 and even 10 year fixed rates if you are concerned about follow on rates. Also consider that there may be arrangement fees to move rates in 2 years along with valuation and legal fees. If you want some security then pay for it once.

Of course check mortgage is portable if you may move.

djbacc

I got my letter from the BoI yesterday in the post, whilst I understand that when on svr the bank has the right to raise the rate at any point I think that to raise it by so much over such a short period of time is a little extreme. The booklet they sent through explaining why they were allowed to do it was basically written in a way that said "you might not like it but there is nothing you can do about it" kind of way.

I had sensed that something like this was coming as we were contacted by BoI a little while ago basically asking us to leave our current mortgage deal, so it is no great suprise.

To be honest it has just made me go out and find a better deal that is fixed again, I am lucky as I have some good equity in the house so have some options in the mortgage market but I have sympathy with those who will be hurt by this rate rise, it will make a very big difference to repayments in a very short space of time.

Is it any wonder that members of the public have such a dim view of banks when they are seen to behave in an unfair way? a 50% rise smacks of money grabbing. Still there is very little that can be done, I will not be rushing to deal with the BoI in the future but I doubt that will really make a difference to them..!

Off to see the mortgage advisor.......

jjbell7

i'm following a few threads on here and there seems to be a lot of finger pointing, who's to blame, which government, i told you so, you should have budgeted but not very much in the way of constructive advice. i've realised it's no good complaining as it'll get me nowhere but stress. i'm trying to use my energy into finding a better deal, hope this helps anyone in a position to move from BOI

opinions4u

englishdesi wrote: »

Those of you who like me have been shafted by BOI. I had a chat with my solicitor this morning and he said the massive steep increase in the SVR goes against the 'fairness to consumers' principle of the FSA and advised me to lodge a complaint as arguably they are not treating their customers fairly by shoving up the rate so much to force them off their books.

I am going to lodge a complaint over the next few days and I suggest you all do the same

While you have the right to complain, they have the right to vary the interest rate.

I doubt the FOS can look at a complaint about a pricing change (commercial decision) that is made in accordance with the T&Cs. Appropriate notice is being given. Cost of funding has changed. If I've read rightly the increase is being staggered too - so a little hint of customer consideration in there. Nice chaps.

djbacc wrote: »

I got my letter from the BoI yesterday in the post, whilst I understand that when on svr the bank has the right to raise the rate at any point I think that to raise it by so much over such a short period of time is a little extreme. The booklet they sent through explaining why they were allowed to do it was basically written in a way that said "you might not like it but there is nothing you can do about it" kind of way.

Not being funny, but how else should they be positioning it? It needs be clear and factual. There is naff all you can do about it.

I had sensed that something like this was coming as we were contacted by BoI a little while ago basically asking us to leave our current mortgage deal, so it is no great suprise.

To be honest it has just made me go out and find a better deal that is fixed
again, I am lucky as I have some good equity in the house so have some options in the mortgage market but I have sympathy with those who will be hurt by this rate rise, it will make a very big difference to repayments in a very short space of time.

Remortgaging if you can makes sense. Those who will be hurt by the rate rise always knew it would come sooner or later. The circumstances may be different to their expectations, but it was always a question of when, not if.

Is it any wonder that members of the public have such a dim view of banks when they are seen to behave in an unfair way? a 50% rise smacks of money grabbing. Still there is very little that can be done, I will not be rushing to deal with the BoI in the future but I doubt that will really make a difference to them..!

The overwhelming problem here is one of a decision taken years ago to link the SVR to the Bank of England base rate, when BBR wasn't equal to the cost of funding. It hamstrung BOI and benefited customers. Now that clause has passed a stated date it's not unreasonable for the lender to charge a rate that more appropriately reflects the cost of their funding. However irritating it may be for customers.

Many building societies have SVRs above 5%. Alliance & Leicester customers pay 4.99% with Santander. Abbey customers 4.29% IIRC. More recent Nationwide customers pay 3.99%. An SVR of 4.49% is not out of sync with the rest of the market.

Morgage_Confused

the 2.99 SVR was a fantastic rate...now BOI are almost up to "normal" svr levels. but its still cheap.

those people on NRAM svr are 4.79% for example.

madoona

deadrobot wrote: »

Your maths are wrong.

2.99% + 50% = 4.49%

its on the money adviser mail on sunday as 50% in massive print for all to see - yes its is a 50% absurd, unreasonable and ludicrous increase I will have to pay over £1000 a month more . I have lodged an official complaint to Bank of Ireland , contacted the Financial Ombundsman, and the Mail On Sunday Financial section. Once a bank gets away with this steep hike they will all do it. I cannot move my mortgages there is no deal for me and if BOI no longer wants it-tough they bought Bristol and West and that is why my buy to lets and main home all sit under one BOI roof - not what I wanted . The original mortgage was by Bank of Ireland mortgage services ltd UK . Yep ltd UK and the change was another thing I did not agree with . Don't delay no matter what your personal circumstances are - a hike of 50% is not acceptable- the bank is out to scam its customers because they are not managing in the economic climate and need more reserves - they have set a precedence over 12 years- they tracked BOE base rate - so when did they get released from that deal-last month someone has blogged - why ??? DONT go for fixed, fixed rate is the FEAR rate stop the banks from behaving like hooligans - any SVR rate change should be blocked if not linked to BOE change - the economy will never be allowed to get back on its feet with interest hijacks like these. Citibank did this to unwanted EGG customers, Northern Rock saved but an irresponsible lender -gave out 99% mortgages how long does the list have to get before consumers realise the BANKS have overstepped the mark .
My Mortgage started off at 4.15% fixed -when off the rate i shot up to 7% fixed at 5.9 again for 4 years when SVR low at 2.99 I was still on 5.9% for 12 mths . A low/reasonable SVR for all with no fixing is the key to kick start economy if people have low mortgage payments they have a disposable income , no disposable income no spending - result double dip recession for sure. If BOI want to off load their british mortgages they should not have entered the market in the first place , I can't change my mortgages I am stuck with them due to the "economy!" and what more when I got my mortgage i thought who is BOI , as it turns out mere amateurs.

MiserlyMartin

DecoSparkle wrote: »

Sweeping generalisation and grossly unfair. When I borrowed what I did it was on entirely different terms (rate was 6.something then) and my circumstances are totally different now - lives change, you cant legislate for every possibility. People aren't saying they don't expect changes, they're saying 1.5% in a short space of time when there's no apparent need snacks of taking advantage of a captive customer base just because they can.

1.5%.... Its 1.5% is that all fuss is about? Thats nothing! There is need for banks to recaptialise. The financial system is still screwed up and will continue to be while we have QE funny money, bank bail outs and stupidly low base rates. Theres no reaching some people.