Mortgage rates creeping up

Mewburn

I have a mortgage with the Bank of Ireland and since my fix rate has expired it has been very low at 2.5 above base rate. Why then even though the base rate has not changed are they upping my monthly mortgage amount?

Can someone explain please

Jimbo1976

I suspect that now your fixed rate has finished your mortgage has reverted to the standard variable rate.

Whilst this may have started close the base rate, SVRs that are not capped have been going up have been increasing. The reason is that lenders cannot borrow at the base rate and the amount that have to pay for funding has been increasing steadily, epecially as a result of the Euro crisis. Some BoI mortgages were also sold to the Nationwide.

latecomer

Because they can. I would guess your rate is not tied to the real Bank of England base rate and hence you are at the mercy of the bank. Check your mortgage paperwork to see whether its tracks the BOE base rate or its their own Standard variable rate (SVR).

kingstreet

As the communications from BoI stated, there was a time-related link to the BoE base rate which set the standard variable rate at 2.99% until June this year.

The standard rate was then increased by 1% in June and a further 0.5% in September to the current 4.49%.

It was BoI "regularising" its position after having, legally, to keep the rate lower than it would otherwise have been.

Mewburn

thanks guys .... is there a way to counteract this?

Jimbo1976

You can't counteract this. You could remortgage to another lender

Mewburn

Hmmm my credit rating is not ideal since i lost my job at the begining of the recession. Don't fancy my chances of getting a better deal.

Thrugelmir

Mewburn wrote: »

thanks guys .... is there a way to counteract this?

Overpay the mortgage if you can afford to.