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13,500 Bank of Ireland tracker customers braced for massive rate increase

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Bank of Ireland is writing to 13,500 buy-to-let and residential customers on tracker mortgages to warn them of plans to more than double the base rate differential it charges.

Around 7 per cent of Bank of Ireland UK mortgage customers will be affected by the changes to the interest rate differential, over 50 per cent of which are buy-to-let borrowers.

For buy-to-let, the rate will jump from Bank of England base rate plus 1.75 per cent to base rate plus 4.49 per cent from 1 May.

For residential borrowers, the increase will be applied in two separate stages. From 1 May, it will rise from base plus 1.75 per cent to base plus 2.49 per cent. From 1 October, it will then be subject to yet another increase, taking it to base plus 3.99 per cent.

A statement from the bank argues the increases reflect higher funding costs.

It says: “This change reflects the significant increase in the cost of funding these mortgages since 2008 and the need for banks to maintain greater levels of capital.”

Coreco communications director Andrew Montlake says: “This is a shocking move by Bank of Ireland. It shows a blatant disregard for the fortunes of its customers. One of our clients has been hit by a sudden rise of 2.74 per cent on a rental property which increases his payments by £776 a month.

“It is all very well offering to waive redemption penalties for those who can move but, for those who cannot, it create unnecessary issues and will surely breach boundaries of TCF.”

The rate increase does not affect Post Office customers.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Is this extortionate rise legal?
    re Bof Ireland
    Could there be another case of mis selling waiting in the wings?

  2. This cannot be fair, if the base rate had risen to 10% after the fixed rate term had finished, we would not of expected the right to reduce the differential- they cant have it both ways !

    Surely in a court of law this has got to be an “unfair” contract clause, if the clause does even exists – we do not have a copy of it in our original Terms & Conditions documentation. Even if the BOL can show that it was in the original terms then these terms were not shown or copied to us and were kept from us, so therefore it must be deemed as mis-sold !

  3. This must be illegal. A base rate tracker is for a term of usually 25 years or until the mortgage is paid in full by the client. If we have not been made aware of this possible increase at the beginning of the mortgage, the bank of Ireland is in breach of contract.

  4. Look like its going to cost us approx £18k
    Can’t be legal

  5. We are all slaves. We have to follow our masters. No other choice!!!!

  6. bank of ireland have been planning a legal robery. They have failed to provided clear information about their own products. Is this treating customers fairly ??
    This will go to COURT…
    Are savings going to be save ??

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