Bank of Ireland rate increase scandal

Carneil3

JUst got a letter that my base tracker rate is going up from1percent to 4 percent due to special conditions. These special conditions are not written anywhere within their rules. Can they do this, the guy on the phone said it was due to having to hold funds in the bank as per the government requirements but cannot show me where it is written.

Also, during the mortgage process I was told that I would stay at 1 percent above base rate and no one mentioned to me that really in the future due to Special conditions the banks could charge me what they wanted... Is this legal. I don't mind doing my bit for the country but to get an increase of 3. Percent because there bank needs to hold more funds surly can't be passed onto the public. The bank has nothing in writing from anyone one regarding this requirement as I did ask. I have been on my mortgage for8 years now so I am not on a term deal.
Can anyone help on this issue, can they do this cheers

stephane_2

Yes they can.....I suppose! Maybe time to switch your mortgage...

jo-bo

You might get more answers in the mortgage forums. However I'd be scrutinising my mortgage paperwork to see what it says, good luck

smiffy

Me too - I was expecting mine to be fixed for the life of the product!

Dylboy

I received this letter this morning too. They've more than doubled my rate from 2.25% to 4.99%. I've also had the mortgage for 8 years btw. I'm going to kick up as much fuss as possible and have already contacted various press and media. The formal process is to make an official complaint to the bank, which I will do, and then take their response to the Financial Ombudsmen Service and suggest we all do the same.

cockaleekee

Dylboy wrote: »

I received this letter this morning too. They've more than doubled my rate from 2.25% to 4.99%. I've also had the mortgage for 8 years btw. I'm going to kick up as much fuss as possible and have already contacted various press and media. The formal process is to make an official complaint to the bank, which I will do, and then take their response to the Financial Ombudsmen Service and suggest we all do the same.

Is it the SVR that has been increased? If so, assuming you are on an SVR product they are within their rights to do so. The FOS cannot (and will not) influence the SVR.

Dylboy

No. It's a tracker mortgage. It is the 'differential' that they are increasing.

alanq

Skipton changed the terms on its tracker mortgages citing “exceptional circumstances” back in 2010. There were reports of a threat of a legal challenge to the change but I am unaware of the outcome of any such challenge.

I suppose it comes down to what is in the fine print and how the product was sold to each customer.

Why is this question being asked on the Credit Card board when there is another dedicated to mortgage matters? There is even a thread on the topic there.
http://forums.moneysavingexpert.com/forumdisplay.php?f=15

DCFC79

alanq ive asked it be moved to the mortgage section.

holly_hobby

As touched on above, yes under the exceptional circumstance rule (which should be displayed/written into the T&Cs of the mge contract), they can do this.

Its generally only exercised where the lender is actually exposed to unstability due to loss leading lending (ie in v low interest circs, where they aren't making sufficient profit to sustain the day to day operational costs).

It may also be a result of the recent consideration of the BOE to effect negative interest, in order to try and force the banks to increase lending (rather than keep on deposit).

The option of course is to source an lower payrate with an alternative lender.

Hope this helps ...

Holly

Natb

Received a letter today from BOI and am getting an increase from 2.25% to 4.99% on a buy to let mortgage I have had for 10 yrs and took out with Bristol and West. Can they do this when it should be a base rate tracker? - any legal advisors or experts out there who can advise please on what the circumstances are that allow them to do this?- they advised me on the phone today the circumstances are that they are not making enough money out of me!!