Almost 200 Bank of Ireland borrowers are seeking an injunction against the lender to stop it doubling the rate on its tracker rate mortgages next month.
In February, the bank said buy-to-let borrowers will see rates increase from 1.75 per cent above base rate to 4.49 per cent above base on 1 May. Residential borrowers will see their rates rise in two stages, firstly to 2.49 per cent on 1 May and then to 3.99 per cent on 1 October.
Borrowers are arguing the contract change is unfair as their lawyers meet this week to determine the cause of action and strength of the case. The action is being financed by the Good Landlords campaign and supported by legal services group Landlord Action.
Property118.com owner Mark Alexander says: “The BoI’s strategy is highly reliant on lethargy and people not complaining. It would be better if it admitted it is wrong and backs down. We don’t want to go to litigation because it’s like going to war but people feel they have no choice.”
Last month, Treasury select committee chair Andrew Tyrie wrote to Financial Conduct Authority chief executive Martin Wheatley to express concern about the BoI’s rate increase. Wheatley replied that he did not have “any concerns” and that the change was fair, prompting a second letter from Tyrie demanding more answers.