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Bank of Ireland tracker mortgage % increase

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  • smiffy
    smiffy Posts: 173 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Well I and found it useful, even though that site is really for landlords, but then I'm actually hold a residential BOI Mortgage.

    I'm sorry, but your comments just don't seem very helpful or constructive :-(
  • alfie476
    alfie476 Posts: 16 Forumite
    I have an ex-Bristol & West Buy to Let mortgage which expired its tracker period some time ago and reverted to the SVR at 2.25%. I have received no letter about interest rises so i phoned up BOI this morning who told me I'm not affected?.. and when asked why he couldn't tell me but offered me an independent broker to check whether there's a better product for me? Can someone explain?
  • poppy10_2
    poppy10_2 Posts: 6,588 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    News this morning seems to back up BoI's claim of exceptional circumstances:

    BBC News: Bank of Ireland makes 1.8bn-euro loss in 2012
    Bank of Ireland has recorded a loss of 1.8bn euros (£1.6bn; $2.3bn) for 2012. The lender saw little respite in the rate at which it had to write off bad loans due to the property crash.


    Last month, Bank of Ireland was criticised for increasing the interest rate on its Base Rate Tracker mortgages, despite the official rate remaining at 0.5%. Some 13,500 borrowers with mortgages from Bank of Ireland and its subsidiary Bristol and West will see their rates almost double.


    This move stemmed from attempts by the group to increase the money it makes on loans and deposits, which fell in 2012 to 0.96% from 1.01% a year earlier.
    poppy10
  • motch
    motch Posts: 429 Forumite
    poppy10 wrote: »
    News this morning seems to back up BoI's claim of :

    BBC News: Bank of Ireland makes 1.8bn-euro loss in 2012
    Bank of Ireland has recorded a loss of 1.8bn euros (£1.6bn; $2.3bn) for 2012. The lender saw little respite in the rate at which it had to write off bad loans due to the property crash.


    Last month, Bank of Ireland was criticised for increasing the interest rate on its Base Rate Tracker mortgages, despite the official rate remaining at 0.5%. Some 13,500 borrowers with mortgages from Bank of Ireland and its subsidiary Bristol and West will see their rates almost double.


    This move stemmed from attempts by the group to increase the money it makes on loans and deposits, which fell in 2012 to 0.96% from 1.01% a year earlier.

    Probably most Lenders will try and up the rate on BTL with "exceptional circumstances". I know someone on BTL who has nearly a 200k mortgage ands paying less than £350pcm! nuts

    Surely though if some people bought 10 years ago or more there should be large profit left in properties. Time to sell?
  • Darrell_G
    Darrell_G Posts: 11 Forumite
    I dont agree these are exceptional Circumstances!

    Bank Base Rate has been at the current rate since March 2009.

    If a business cannot manage its own finances correctly to be profitable, the business goes Bankrupt or enters administration. Its not the customers responsibility to bail a business out of mistakes made by poor management & over excessive bonuses. Maybe all the bankers bonuses should be recalled first for their part in this fiasco?

    Why should customer pay for their mistakes?
  • Darrell_G wrote: »
    I dont agree these are exceptional Circumstances!

    Bank Base Rate has been at the current rate since March 2009.

    If a business cannot manage its own finances correctly to be profitable, the business goes Bankrupt or enters administration. Its not the customers responsibility to bail a business out of mistakes made by poor management & over excessive bonuses. Maybe all the bankers bonuses should be recalled first for their part in this fiasco?

    Why should customer pay for their mistakes?

    Agreed, however the near same argument could be made of landlords not preparing for an eventual rise in rates which might happen as it did when we fell out of the ERM back in the day.
  • kingstreet
    kingstreet Posts: 39,277 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Darrell_G wrote: »
    Bank Base Rate has been at the current rate since March 2009
    The lender does not borrow at bank base rate. It negotiates its facilities with other lenders and institutions. From time to time it has to renegotiate the terms and rates it pays on its borrowings.

    In the last five years, this has become more difficult and more expensive.

    Be careful what you wish for. If the lender did cease trading, your account could be purchased by another institution and the same thing could happen to the rate, except it could be a bigger increase.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • Darrell_G
    Darrell_G Posts: 11 Forumite
    edited 4 March 2013 at 5:42PM
    Please feel free to amend & use yourselves.
    Constructive comments appreciated please.


    FORMAL LETTER OF COMPLAINT TO BANK OF IRELAND & REFUSAL OF MORTGAGE RATE INCREASE.

    In response to your letter 25th February 2013.

    To Whom It May Concern:

    I do not accept any change to my bank base rate tracker mortgage product, which clearly states ‘the interest rate we charge will track base rate for the whole mortgage term’ with a rate stated of 1.75% above Bank of England’s base rate.

    It also states in the terms of the Promotional Rate Conditions – “After this date the interest we will charge will track base rate for the remainder of the mortgage at a fixed differential of 1.75% above base rate.”
    Whist there are inclusions relating to the ‘Differential’ this is very ambiguous.
    Therefore, the Bank of Ireland has either mis-sold or mis-led me into a product that I believed was a ‘Fixed Base Rate Tracker’ when you are now implying it is a ‘Variable Rate Tracker’.
    If the bank is prepared to offer rates & figures of 1.75% fixed differential for the term of the mortgage, then that is what it should be or the mortgage has been mis-sold by you the bank.

    These proposals of increasing the differential from 1.75% to 4.49% are totally unjustified & unfair terms, when average mortgage tracker products are 2%-2.5% for the term of the mortgage above base.
    You have given no explanation how you have arrived at the proposed new differential figure & clearly stated it was fixed at 1.75% for the term of the mortgage.
    Your proposals are unreasonable & an unfair rate rise. It is not mine or any other Bank of Ireland customers responsibility to prop up your business which is claiming the fault of adverse market conditions. Interest rates have been 0.5% since March 2009. The bank should accept its mistakes over its own financial shortcomings. Given the fact your booklet provided with your letter ‘Understanding the changes to your Buy to Let Base Rate tracker differential’ quoting….’Is the Bank of Ireland doing this because it is in financial difficulty’ with the answer as ‘No. Bank of Ireland has a strong mortgage business in the UK’ Therefore there is no need at all to alter the differential in any instance.

    I await your reply at your earliest convenience & should you not withdraw or greatly revise your proposals with clarity & honesty to allow me to make an informed decision, I will have no hesitation to take this to the Ombudsman & further onto the courts.

    Until a fair & satisfactory solution is arrived at, I do not authorise Bank of Ireland to collect via direct debit anything other than the current original amounts from my bank account for the ‘Fixed differential, Base Rate Tracker’ of 1.75% above base that was agree in 2004 in the original contract.
  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    If you are going to threaten going to court Darrell, it may be wise to state why and what you intend to prosecute the BOI for. Otherwise it just looks like another threat without much substance.
  • rckl88
    rckl88 Posts: 13 Forumite
    Tenth Anniversary Combo Breaker
    edited 4 March 2013 at 6:01PM
    Agreed, however the near same argument could be made of landlords not preparing for an eventual rise in rates which might happen as it did when we fell out of the ERM back in the day.

    HUH??? I thought this is about an underhanded action by a bank because they need more money!

    Why do people keep bringing up landlords? This affects residential and BTL mortgages! I'm sure a lot of customers took this mortgage prepared for what happens with rate rises! They took this mortgage preparing for falls and rises pegged to the BR at a particular rate (like it says on the tin i.e. 1.75%+BR for term of contract)! A fair rate might I add, where the bank made a nice easy profit!

    What they are not prepared for is an additional 2-3% to bail out the bank because they cocked it all up.

    Personally I took out this mortgage prepared for whatever happens to the BR which I expect to rise in more than a years time maybe 3...

    For general info: Please note not everyone is affected, from what I've gather by reading posts and articles those affected have accounts from before 2001 approximately.
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