interest rate changes on mortgage

curlylocks25

hi

can you help me understand why my mortgage lender has put my mortgage payments up twice in past year ?
as i understand the bank of england variable rate is 3.99% for home owners. my lender bank of ireland is now charging 4.49% . my payments have gone up from £541 per month to over £800 interest only.
i have asked them and they say it is in line with the national rate??

is this correct ??

thanks. Michael

Thrugelmir

The interest rate charged to you represents the cost to BOI to provide your finance and the risk of doing so. BOE base rate has no bearing on this at the current time.

To obtain a better rate you'll need to remortgage elsewhere.

Crashandburn

curlylocks25 wrote: »

hi

can you help me understand why my mortgage lender has put my mortgage payments up twice in past year ?

Increases in Mar and Oct probably as a follow-on from having such a low SVR and in effect losing money because of it.

It's a rate decided by them to fit in with their business model. Not making enough money elsewhere so easy target to increase the rate.

As Thrugelmir says, use it as a prompt to leave

Rob_n_Bar_Stewards

I rang them in disbelief......the guy on the phone read the reasons from some sort of staff briefing letter. They are waiving all early termination / transfer fees so clearly want all borrowers to go elsewhere......I will....

ambershopper

I too have received a letter from BOI today on my BTL mortgage. they say the increase is their new "differential tracker rate!" My mortgage was with Bristol and West previously and I cant see anywhere in paperwork about this goal post changing "scam" on their part. Is there any use complaining to the FSA or is leaving the only option. as with most BTL loans I am unlikely to get another 2.05% rate ( which is what I am currently on) rather than the 4.99% that BOI are increasing it to in May... I am fuming if banks have the right to use us as fodder to prop up their bank reserves like this...

Any advice on way forward welcomed

kiafrika

Sigh, mine arrived today as well :-(

shortchanged_2

It's been talked about on several threads on here before.

The SVR that you are on is a rate that is decided by the bank/building society.

There is no obligation for that rate to track the BoE base rate with their SVR's. These rates differ from tracker mortgages which do usually track the BoE base rate.

kingstreet

Residential borrowers saw their rates increase by 1% in June last year, followed by another 0.5% in September, to take their rate to 4.49%.

BoI was originally limited to a cap of 2.99% until March 2012 and once that ended, up it went.