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Thousands will see monthly increase as terms of base rate tracker deals are changed, due to 'special condition'
Thousands of Bank of Ireland and Bristol & West mortgage customers in the UK will see their monthly mortgage costs as much as triple after the terms of their base rate tracker deals were changed, it has emerged. Bank of Ireland has prompted fury after revealing it was triggering a "special condition" clause contained in loan agreements that, it said, allowed it to increase the interest rate "differential" on some of its UK base rate tracker mortgages. The changes affect around 13,500 residential and buy-to-let customers. They mean that a buy-to-let mortgage holder who is currently enjoying a typical interest rate of 2.25% (made up of the Bank of England base rate, which is currently 0.5%, plus a 1.75% differential) will be paying 4.99%. Some residential mortgage customers are paying a rate of 1.39% or less, and will see this jump to 4.49%. A Bank of Ireland spokeswoman said the changes "reflect the significant increase in the cost of funding these mortgages since 2008 and the need for banks to maintain greater levels of capital".....Read more here
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The chairman of the Treasury Committee has written to financial regulators about Bank of Ireland's plan to raise customers' mortgage tracker rates. In a letter to the Financial Services Authority, Andrew Tyrie said he was "very concerned" and asks if it was a case of product mis-selling. Despite the Bank of England base rate remaining at 0.5%, Bank of Ireland is almost doubling its tracker rate. Bank of Ireland, which owns Bristol and West, said it had no comment.
About 13,500 mortgage borrowers with Bank of Ireland and Bristol and West will see the cost of their home loan rise......Read more here
The Post Office will face criticism today in the wake of the decision by its financial partner, Bank of Ireland, to double the rate of thousands of mortgage borrowers to 4.49 per cent. The increases apply to Bank of Ireland customers, not borrowers under the Post Office brand. But they have sparked a furious reaction, including demands from Andrew Tyrie, chairman of the Commons Treasury Committee, that the Financial Services Authority explains why it has permitted the increase. A critical response is due today from the FSA, which is likely to embarrass the Post Office over its links to the Irish lender.....Read more here