Bank of Ireland tracker mortgage % increase

Denise2007

Just read the article on this is money.co.uk, presume you're talking about that ??

The FSA have said they do not believe the terms to be unfair. The treasury comm have requested a fuller response to show that they have fully considered the issue.

Little_Landlord

brit1234 wrote: »

No one has proved it unfair here. It is written into the contract, the clause is valid, a series of extreme events has taken place. The interest rate is still far lower when the mortgage was taken out and you have had years of extremely low mortgages at the expense of prudent savers.

I would have more sympathy if Landlords hadn't massively hiked rents despite mortgage costs being slashed. It's tenants who are the real victims here.

Let me put a human side to your view of landlords brit1234.

Not all landlords are big corporations, they're just individuals like me who had a small amount of equity in their home. They saw an opportunity, and were encouraged, to buy property as a way of having a pension in the future.

I bought a number of properties in 2004 and paid top whack for them, no complaints there, that's life, but as the economic climate changed and Mortgage lenders tightened their criteria for lending, a flood of newly built properties came onto the rental market. The result was that the supply of rental accommodation outstripped demand and the consequence of that was rental income came down. I now get significantly less in rents than i did in 2004 but this loss was covered by the reduction in the interest rate.

I am now, like i guess many others, in a catch-22 situation. the properties are in negative-equity, so i can't afford to sell them, and due to reduced rents they only just cover the current mortgage demand so i can't afford the 122% increase being demanded. I can't go to another lender as i am self-employed and that's a complete no-no under the current lending rules and attitudes. So what do i do now?

I am at my wits-end. The only scenario i can see is that i hand the keys back to BOI, they then sell the properties at auction and come to me for the inevitable shortfall. As i don't have the finances to pay this, i will have no option but to declare bankcruptcy. I have NEVER missed a mortgage payment during the last 9 years but i will be forced into defaulting due to no fault of mine, i can't see how this can be seen as 'fair' i was not informed of the 'special circumstances' clause when i took out the mortgages and i feel that if a lender can 'move the goalposts' at will then the contract i signed isn't worth the paper it's written on.

I am worried sick that there is a very real chance that my efforts to do the best for my family could result in us losing the roof over their heads.

ILW

Little_Landlord wrote: »

Let me put a human side to your view of landlords brit1234.

Not all landlords are big corporations, they're just individuals like me who had a small amount of equity in their home. They saw an opportunity, and were encouraged, to buy property as a way of having a pension in the future.

I bought a number of properties in 2004 and paid top whack for them, no complaints there, that's life, but as the economic climate changed and Mortgage lenders tightened their criteria for lending, a flood of newly built properties came onto the rental market. The result was that the supply of rental accommodation outstripped demand and the consequence of that was rental income came down. I now get significantly less in rents than i did in 2004 but this loss was covered by the reduction in the interest rate.

I am now, like i guess many others, in a catch-22 situation. the properties are in negative-equity, so i can't afford to sell them, and due to reduced rents they only just cover the current mortgage demand so i can't afford the 122% increase being demanded. I can't go to another lender as i am self-employed and that's a complete no-no under the current lending rules and attitudes. So what do i do now?

I am at my wits-end. The only scenario i can see is that i hand the keys back to BOI, they then sell the properties at auction and come to me for the inevitable shortfall. As i don't have the finances to pay this, i will have no option but to declare bankcruptcy. I have NEVER missed a mortgage payment during the last 9 years but i will be forced into defaulting due to no fault of mine, i can't see how this can be seen as 'fair' i was not informed of the 'special circumstances' clause when i took out the mortgages and i feel that if a lender can 'move the goalposts' at will then the contract i signed isn't worth the paper it's written on.

I am worried sick that there is a very real chance that my efforts to do the best for my family could result in us losing the roof over their heads.

Sorry, but you started a business using borrowed money. Most businesses fail in the first decade and the money is lost. You should have accepted the risk when you started off.

If you bought in 2004 then even 5% would be lower than you could have hoped for at that time.

Little_Landlord

ILW wrote: »

Sorry, but you started a business using borrowed money. Most businesses fail in the first decade and the money is lost. You should have accepted the risk when you started off.

If you bought in 2004 then even 5% would be lower than you could have hoped for at that time.

You've missed my point completely. a) this was not designed as a business, it was a way of making up for a lack of pension. b) I have no complaint about interest rates going up, this would be as a result of market forces and those same market forces would have a positive effect on the capital value of my properties.

What i love about people like you is how black/white you are; there's no grey. There's no injustice as far as you're concerned, you must love it in your ivory tower being right all the time. I'm sure you're getting a big kick out of this right now. Unfortunately life isn't black/white and there is injustice in the world and, as far as I and it seems [reading this forum] many others are concerned, this is one of them.

Denise2007

Little_Landlord wrote: »

Let me put a human side to your view of landlords brit1234.

Not all landlords are big corporations, they're just individuals like me who had a small amount of equity in their home. They saw an opportunity, and were encouraged, to buy property as a way of having a pension in the future.

I bought a number of properties in 2004 and paid top whack for them, no complaints there, that's life, but as the economic climate changed and Mortgage lenders tightened their criteria for lending, a flood of newly built properties came onto the rental market. The result was that the supply of rental accommodation outstripped demand and the consequence of that was rental income came down. I now get significantly less in rents than i did in 2004 but this loss was covered by the reduction in the interest rate.

I am now, like i guess many others, in a catch-22 situation. the properties are in negative-equity, so i can't afford to sell them, and due to reduced rents they only just cover the current mortgage demand so i can't afford the 122% increase being demanded. I can't go to another lender as i am self-employed and that's a complete no-no under the current lending rules and attitudes. So what do i do now?

I am at my wits-end. The only scenario i can see is that i hand the keys back to BOI, they then sell the properties at auction and come to me for the inevitable shortfall. As i don't have the finances to pay this, i will have no option but to declare bankcruptcy. I have NEVER missed a mortgage payment during the last 9 years but i will be forced into defaulting due to no fault of mine, i can't see how this can be seen as 'fair' i was not informed of the 'special circumstances' clause when i took out the mortgages and i feel that if a lender can 'move the goalposts' at will then the contract i signed isn't worth the paper it's written on.

I am worried sick that there is a very real chance that my efforts to do the best for my family could result in us losing the roof over their heads.

Hi,

Am sorry to hear about you situation. I also bought several properties in London, south west and in the north over the last decade. Properties bought in the north and south west were bought in 2008 which was the top of the market ... And I think anyone who bought then would agree ! As they were BTL which is a business I needed to put down 15% deposit minimum. Values have now fallen but I am not in negative equity but have lost my deposit. The other properties bought in 2004 and 2006 are not in negative equity and had increased in valued significantly up to 2008, they then fell and are now starting to increase but are nowhere near negative equity and worth much more than I paid for them in 2004. The rents on these properties have been subsidising the properties bought in 2008 which I really regret buying and wish had just been happy with the properties bought earlier. But that's life. Even with the mortgage going up on the BOI mortgage rent for this property will still be subsiding later mortgages.

I am surprised you are in neg equity on proper purchased in or prior to 2004, could you flip onto interest only until the markets improve ?
Would allow you to keep them until market conditions improve. Are they all in neg equity ?

All BTL are individuals and there are some like myself who have been struggling on mortgages rates of approx. 5% on property bought at the top of the market. I had to flip 2 of them to interest only to cover costs but over the last two years but have flipped back as rent increased. The last 5 years have been incredibly tough as a landlord and a bit of a wakeup call for me personally.

There are options so don't stress !

brit1234

Little_Landlord wrote: »

You've missed my point completely.

At 4.75% your mortgage payments are lower than 2004, you should be ok.

Now if you aren't ok then your business venture is flawed and should be allowed to fail. We are meant to be in a capitalist economy, this isn't capitalism when we bail out the failed constantly and punish the prudent like savers. Its this lack of capitalism that is holding back the economy. Recessions are good for clearing out the economy of the sick/inefficient areas which in turns promotes new growth. For example if those over geared in trouble landlords were forced to sell up it would provided cheaper homes for first time buyers who would then stimulate the economy by buying white goods and furniture.

Little_Landlord

Denise2007 wrote: »

Hi,

Am sorry to hear about you situation. I also bought several properties in London, south west and in the north over the last decade. Properties bought in the north and south west were bought in 2008 which was the top of the market ... And I think anyone who bought then would agree ! As they were BTL which is a business I needed to put down 15% deposit minimum. Values have now fallen but I am not in negative equity but have lost my deposit. The other properties bought in 2004 and 2006 are not in negative equity and had increased in valued significantly up to 2008, they then fell and are now starting to increase but are nowhere near negative equity and worth much more than I paid for them in 2004. The rents on these properties have been subsidising the properties bought in 2008 which I really regret buying and wish had just been happy with the properties bought earlier. But that's life. Even with the mortgage going up on the BOI mortgage rent for this property will still be subsiding later mortgages.

I am surprised you are in neg equity on proper purchased in or prior to 2004, could you flip onto interest only until the markets improve ?
Would allow you to keep them until market conditions improve. Are they all in neg equity ?

All BTL are individuals and there are some like myself who have been struggling on mortgages rates of approx. 5% on property bought at the top of the market. I had to flip 2 of them to interest only to cover costs but over the last two years but have flipped back as rent increased. The last 5 years have been incredibly tough as a landlord and a bit of a wakeup call for me personally.

There are options so don't stress !

Thanks for your understanding. Yes they are all in negative equity and i already have them on interest only.

leveller2911

Little_Landlord wrote: »

Let me put a human side to your view of landlords brit1234.

Not all landlords are big corporations, they're just individuals like me who had a small amount of equity in their home. They saw an opportunity, and were encouraged, to buy property as a way of having a pension in the future.

I bought a number of properties in 2004



I have NEVER missed a mortgage payment during the last 9 years but i will be forced into defaulting due to no fault of mine,

I am worried sick that there is a very real chance that my efforts to do the best for my family could result in us losing the roof over their heads.

You posted you had a "small amount of equity" and "purchased a number of properties in 2004".Why on earth would you buy a number of properties if you only had a small amount of equity?

Who encouraged you to buy?. There are many ways in which to save for old age. I'm encouraged to buy a new car everyday on TV but I don't go out and buy one.


The fact remains you "Gambled" (very appropriate word) and lost so saying "you will be forced to default through no fault of your own" is rubbish.

The ones I feel sorry for are the young FTB who with small deposits could not compete with the BTL landlords who increased their borrowing/offer from their perceived increase in the value of their "portfolio" to buy more and more homes.The "injustice" is the vast numbers of young people who cannot afford to buy a home.

In short you gambled everything on red on the roulette wheel and when it stopped spinning black was king.

Could you not see any downside to a pyramid scheme? even with the rise in rates from BOI, sooner or later the rates would have risen.

Denise2007

Little_Landlord wrote: »

Thanks for your understanding. Yes they are all in negative equity and i already have them on interest only.

Am really sorry to hear that. I presume they've always been on interest only then if they're in negative equity. I doubt you will be able to remortgage elsewhere then even if you weren't self employed. I really don't know what is going to happen with these increases but it sounds like the FSA will not be taking any action. On the property 118 thread there hasn't been a huge amount of advice yet and it sounds like counsel is waiting on the next response from the FSA. I think you need to have a back up plan if these changes are not reversed.

Can you change the term ? You could discuss options with BOI. What about seeing a good broker ? Could you use some savings to reduce down capital to bring down the LTV ?

I would def suggest continuing to make the payments so not to damage your credit rating.

Again, I know this is stressful and sorry you're in this position. I agree with some comments re business model should be able to deal with increases but those comments are not helpful to someone struggling looking for advice ...

Denise2007

leveller2911 wrote: »

You posted you had a "small amount of equity" and "purchased a number of properties in 2004".Why on earth would you buy a number of properties if you only had a small amount of equity?

Who encouraged you to buy?. There are many ways in which to save for old age. I'm encouraged to buy a new car everyday on TV but I don't go out and buy one.


The fact remains you "Gambled" (very appropriate word) and lost so saying "you will be forced to default through no fault of your own" is rubbish.

The ones I feel sorry for are the young FTB who with small deposits could not compete with the BTL landlords who increased their borrowing/offer from their perceived increase in the value of their "portfolio" to buy more and more homes.

In short you gambled everything on red on the roulette wheel and when it stopped spinning black was king.

Could you not see any downside to a pyramid scheme? even with the rise in rates from BOI, sooner or later the rates would have risen.

Give him/her a break, they're stressed and comments like the above are not helpful