Bank of Ireland tracker mortgage % increase

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  • kingstreetkingstreet Forumite
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    TBH I have nothing to bring to this particular party, I'm afraid.

    You need to hang your argument on what terms and conditions applied at the time and if you were made aware of them. Even then, I'm not sure the outcome would involve the lender's decision being reversed.

    It appears complicated by the timing - either before or after regulation started on 31/10/2004 and clouded by some being BTL cases, which fall outside the consumer protection regulation of the FSA/FOS etc.
    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.
  • Dylboy wrote: »
    I am definitely going to fight this. I've been advised to make an official complaint to the bank - to which they have 8 weeks to reply - and then take their response to the Financial Ombudsmen Service. It's long winded but in the meantime I'm going to stir up as much sh*t as I can for them and suggest you all do the same by emailing BBC Watchdog, Radio 4's Moneybox, Radio 2's Jeremy Vine and anyone else you can think of!
    "Rip Off Britain" would seem appropriate!
    I am also writing to them to challenge the legalities - and fairness which is a different matter.
  • definitely think your right . Big collective stand , BIG VOICE and prob through the legal system
    Yes, let's make the expression "doing a Bank of Ireland" a common term of derision against anyone who rips off anyone legally according to the letter of the law, but unfairly in terms of decency and good practice!:T
  • JimmyTheWigJimmyTheWig Forumite
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    Hobby wrote: »
    I was never provided with the Residential Mortgage terms when I took out the Buy to Let mortgage. Clearly there is mention of it within the terms of the Buy to Let mortgage but thats as far as it goes.

    My argument is that how can the BOI now invoke a certain condition when these certain conditions were not available or provided in the first place
    I'm no expert, but I would have thought that the fact that the clause was mentioned in what you got means that you were made aware of it. I would imagine that if, at the time, you had asked them what this condition was then they would have provided you with the information.
  • cs1800cs1800 Forumite
    21 Posts
    Yes a Buy to Let Tracker Mortgage. I too have a Residential Mortgage Conditions A5 leaflet from 2007 (relating to a further loan) but the 6 (m) in that leaflet would not allow them to increase the differential.
    I don't have a Residential Mortgage Conditions leaflet with my 2003 Offer. I assumed I had thrown it away.

    Do you have the exact wording of 6(m) please. I have requested this from BOI but no reply yet.
  • cs1800cs1800 Forumite
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    Pobinr wrote: »
    I have two 2001 BTL B&W base rate tracker mortgages now with BOI. Not yet received the dreaded letter from BOI.
    We took out out a further advance on one in 2008.
    The 2007 conditions booklet for that advance (6n) says - 'We may reduce a positive differential or increase a negative differential at our discretion by giving you not less than 7 days written notice. This means we can change the differential in a way that is favourable to you'
    (6j) states 'Unless we change the differential (if any) under condition (6n) we will not change the tracker rate unless the base rate changes'
    In other words its tracking base rate.
    Condition 25 says 'Changes to these conditions. We may change any of these conditions at any time by giving you not less than 30 days notice in writing as long as the change is favourable to you'.
    So if this booklet applies to our original mortgage advances then we are OK. But guess what we cannot find a booklet for the original advances in 2001.
    It would seem from other forums neither can anyone else!
    People have even asked their solicitors for the document to no avail.
    So it would seem BOI are trying to move the goal posts on justification of a
    mortgage terms & conditions document that no one was given!
    Has anyone been able to find this document namely Mortgage terms & conditions for their pre 2004 B&W tracker mortgage ?

    If they have been transparent & open as is required of them, then how come no one was aware of this possibility of a hike in the differential ?
    After all who would knowingly take a out a tracker mortgage that one day would in effect become a non tracker?
    A tracker mortgage does not have two variables. It only has one variable namely the bank of England base rate.
    If they try to increase the differential from 1.75% to 4.5% then it's surely another case of miss selling.
    Because clearly it's wasn't what it said on the can which is 'base rate tracker mortgage' when BOI are now trying to make them infinitely variable mortgages!

    Yes I have the terms dated July 2003 all it says is that.

    Tracker rate means a rate of interest which is equal to base rate plus or minus any differential that applies.

    Unless we change the differential under condition 6(m) of our Residential Mortgage Conditions, we will only change the tracker if base rate changes.

    I was not supplied with a copy of the Residential agreement at the time, I have asked BOI to supply me with a copy to see what this clause says. I am starting to believe it is no more that a 2 line cause and as it was to fundamental to the agreement I am amazed B&W did not include it in the text of my T&C, I am also starting to wonder why BOI didnt quote it in the letter telling me the differential was going up - you would have thought if there was justification in the cause they would have been more than happy to quote it, but we will have to see what they come back with.
  • cs1800cs1800 Forumite
    21 Posts
    bluecross wrote: »
    Not happy about this change - even joined the forum to express this.
    My "lifetime" tracker flex mortgage is going to jump from 1.19% to 4.49% that's nearly 4x as much.

    Even if it is a "special circumstance" it is still more than the current market rate. This just seems a way to ditch the customers they are not making any money on.

    For those who can't find their conditions; here is an extract from the conditions for the B&W Flex mortgage 2001 - Edition 2:
    Condition 6(m):
    Unless otherwise provided in the offer, we may change the differential (if any) at any time by giving you not less than 30 days written notice. Conditions 69(o) to 6(r) apply to any change in the differential which we make under this condition 6(m).

    Condition 6 (p) Before the end of any protected period, we will only increase a positive differential or reduce a negative differential:
    (i) if we believe that the increase or reduction is necessary to maintain the viability of our business following a serious adverse change in market conditions or in the relationship between the base rate and the rate which we pay on the funds we raise for use in our mortgage lending business;

    It is the conditions 6(m) and 6(p.i) which I think that they are using to increase the differential. Though the letter is not very clear about how or why.
    I would have thought that if it was "necessary to maintain the viability" of their business - it would mean they were in financial difficulty - but their website says they are not and that their "UK mortgage business is healthy"!

    I would have thought that even if they are legally able to do this - there may be grounds for miss selling of these not-so "lifetime" tracker mortgages.

    I agree with others here we need to work together to change or stop this, not just take it lying down. The more of us that complain to them the FOS, or the media the more expensive and embarrassing it is for them.

    Twitter: @talktoBOI #BOIscandel

    I have condition 6(m) it refers to conditions 69(o) to 69 (r) do you know what they are please.
  • BR_LandlordBR_Landlord Forumite
    104 Posts
    I'd certainly like to think that if the base rate returned to normal levels then the differential would return to normal levels.
    If not, they'd be losing customers hand over fist.
    You would think so, but BofI state that when BofE Base rises, their rate will TRACK it with the new differential. This new differential is set to remain.

    The mortgages affected are all pre 2004 mortgages, both residential and Buy to Let. The T & Cs relate to certain mortgage products only. It also seems possible that the T & C booklet did not go out with the offers and other documentation but was referred to in the Offer. The T and Cs were amended after 2004 and same clause became an opposite meaning where differential could only be decreased thus being in the consumer's favour.
  • The BBC stated that a lot of these mortgages were self certification mortgages.

    I don't know what "a lot" means, neither do I have any evidence other than what the BBC stated on the business section of their website.

    If true, I guess it gives an indication of why A) it was so popular amongst landlords and B) why so many now find themselves in trouble.

    You are probably right. I don't think LLs are in trouble, whereas residential mortgage holders will be. This is a sudden and enormous rate rise for the average homeowner to deal with.
  • Thrugelmir wrote: »
    I doubt BOI will maintain the differential in the longer term when rates return to normal levels.

    This time you are way off Thrug. The letter from Bank of Ireland makes it quite clear that when the Bank of England Base rate increases, then their new differential will remain and the % will track at the higher level.

    This is a lot of the reason behind the outcry. I think if lenders thought it was an emergency hike to be restored at a later date the reaction might have been less heated.
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