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Original poster

Bank of bloomin Ireland mortgage..... more than tripled our interest rate!

13 replies

ByTheWay1 · 27/02/2013 20:21

We have a tracker with BOI that has been an absolute god send for the past 6 years - it tracks at 0.85% above base - so we were paying 1.35% .. lovely.....

got a letter today saying they are putting it up - to 3.99% above base rate... so 4.49% - just like that.... and reading the small print - just because they want to is a valid reason.... I am totally gobsmacked.....

Luckily, because ours is interest only, we have saved the capital in a "high" (hahahaha - 2.55%) interest account and can pay it off, makes sense to now.. - but am sweating now about what if we hadn't done that!!!

This can't be normal surely? Why on earth can they do this to people - or is it just done to folks like us who have a small amount outstanding to try and get it paid off???

OP posts:

Babyroobs · 27/02/2013 21:23

I think we will see mortgage interest rates rising very steeply soon .

CogitoErgoSometimes · 28/02/2013 14:36

"This can't be normal surely?"

Lenders can change their variable or tracker rates at any time. It's one of the things to consider when taking out either a fixed or variable rate mortgage. Variable-rate is usually cheaper in the short-term but, if an increase of a few percent would be a train-smash, it's usually better to go for the more expensive fixed rate.

Original poster

ByTheWay1 · 28/02/2013 14:51

I know, I just feel like we were "promised" a tracker at 0.86% above base rate - one of those where you get to the end of your fixed rate and you go on to this automatically "for the rest of your loan period" .... there was nothing at all said about this changing... other than with base rate changes .....

it was further confused by the fact it was taken out with Bristol and West - and somehow ended up eventually through sell-outs and takeovers with BOI... so we have about 26 pages of small print from all companies.

I am glad we are in a position to pay it off......

OP posts:

CogitoErgoSometimes · 01/03/2013 07:30

'Promises' mean jack if they are not on a contract :) I'll be in a similar position come August when my fixed rate ends. At the moment the SVR is 2.5% but, by then, things could easily have changed. Presumably you have the option to switch to a different lender?

Original poster

ByTheWay1 · 01/03/2013 08:39

Yes we do have the option, but since it was interest only, that won't happen - though apparently we do have an A+ credit rating (nice to know)

we have saved the capital needed since we are in the last 6 years anyhow, so now that the interest rate on the mortgage will be higher than the rate we are getting on that savings account, we will pay it off and be mortgage freeeeeeeeee.....

OP posts:

theborrower · 01/03/2013 19:49

We got our mortgage with B&W too, which then changed to BOI. We used to be on 5.98 fix, then dropped to their SRV in 2009 which was 2.99, but we got a letter last spring saying they were putting it up to 3.99 then 4.49 3 months later, and that's what we've been on for the last few months. I'm surprised they took so long to change yours, to be honest!

Original poster

ByTheWay1 · 01/03/2013 20:10

I kept reading that people on the SVR were being affected, but did not know it would spread out to all mortgage types.... heyho - gets round to us all eventually I guess...

OP posts:

nannynick · 02/03/2013 14:37

The BOI situation was discussed today on MoneyBox (link to iPlayer)

Complain to BOI. When the complaint is rejected, complain to the Financial Ombudsman. That will then cost BOI and you never know may mean that the FO makes a ruling to determine what is fair in cases like this.

MummytoKatie · 02/03/2013 14:47

It's in the Guardian as well - same advice as nannynick gave. Can't work out how to link.....

Buttonsbythesea · 02/03/2013 14:53

I too am with bank of Ireland. We got our letter yesterday. We have to find another £400 a month . Bet their chief exec gets a whopping bonus too . Grrrrrr

SuckingDiesel · 02/03/2013 14:59

Yep, BoI hiked our interest rate last year so you've been 'lucky' not to be hit until now.

We moved our mortgage immediately to Nationwide where we got a very favourable 5 year deal. And we closed our current and credit card accounts too which were all with BoI before.

theyoungvisiter · 02/03/2013 15:18

I think some of the comments on this thread comparing the OP's situation to being out of a fixed rate deal are misunderstanding the terms of a tracker mortgage - this is not the same as a lender changing their variable rate when you come out of a fixed rate deal - when you sign for a tracker mortgage it says in the contract that you agree to pay BoE interest rate plus whatever percentage on top - ours is BoE plus 0.5%.

Tough tits for you if the BOE goes up - tough tits for the lender if the BoE goes down.

I agree this is pretty shocking on the part of BOI and I'd be fucked off too. You have signed on one basis and they are changing the terms unilaterally to suit themselves because the run of luck has gone the opposite way to the one they hoped. If you sign a contract for fixed term then of course you know that when the fixed term runs out all bets are off, but most trackers are supposed run for the life of the mortgage.

Ours does say in the small print that it is not 0.5% above the bank of England rate, but 0.5% above the Barclays interest rate. When I queried this I was told that it had always been the same as the BoE rate but might not be in the future - however of course any change in the Barclays interest rate would affect their savings products across the board so is not something they'd do lightly, I imagine, as they would lose on some products while gaining on others. However I knew they could do this when I went into the deal - I would be considerably more pissed off of they changed the 0.5% mark up as that is NOT flagged as something negotiable in the contract.

I agree with Nanny Nick - complain complain complain. I'm sure there probably is something in the small print allowing them to do this, but that doesn't mean they should be allowed to get away with rewriting a mortgage contract to suit themselves.

As this Guardian article explains, many mortgages have "special circumstances" clauses buried in the small print allowing them - for example - to demand full repayment of the entire mortgage within one month or repossess the house. Similar clauses are probably in the small print of most of the people commenting on this thread. Just because something is in the small print doesn't mean you should take it lying down.

theyoungvisiter · 02/03/2013 15:29

This article is useful:

www.guardian.co.uk/money/2013/mar/02/bank-of-ireland-mortgage-rates-double-triple

"As to what Bank of Ireland customers should do, Boulger says they should first write a letter of complaint. The bank is then required to respond within eight weeks. "During that time they cannot enforce the rate increase. If the complaint is rejected, as I expect it will be, and it's a residential mortgage, the borrower can take it to the Financial Ombudsman Service, which could delay it for months or even a year. Normally, the ombudsman does not allow charges to be imposed (such as on arrears) while a complaint is being resolved."

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