Consumer protection group Which? has hit out against the Bank of Ireland’s tracker rate hike and is offering a free online tool to encourage those affected to complain.
In February, the bank informed 13,500 buy-to-let and residential customers of plans to more than double the base rate differential it charges them.
Which? is encouraging customers affected by the rate change, which becomes effective from 1 May, to complain if they were led to believe their rate would track the Bank of England base rate by the same amount for the term of their mortgage or if their mortgage had ‘life’ or ‘lifetime’ in its name.
Which? executive director Richard Lloyd says: “Burying such important changes in the small print is wholly unfair. Bank of Ireland is taking advantage of its customers by hiking rates at a time when the base rate is static.
“Customers should complain if they were led to believe they had bought a ‘lifetime’ mortgage and Bank of Ireland must deal with these complaints quickly and fairly.
“The Financial Conduct Authority must make sure all banks communicate important clauses to their mortgage customers, and the Government must ensure that the Consumer Rights Bill offers greater protection from unfair terms and conditions.”
For buy-to-let borrowers, the rate jumps from Bank of England base rate plus 1.75 per cent to rate plus 4.49 per cent from tomorrow.
For residential borrowers, the increase will be applied to in two separate stages. From tomorrow, 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 Bank of Ireland spokesman said it is conscious of the consequences of the increase and will deal with customers with “appropriate care”.
He 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. This rate increase does not affect Post Office customers.
“Bank of Ireland has a range of mortgages available to customers who would like to review their mortgage options. If a customer decides to move to an alternative mortgage provider, no early repayment charges will apply.”