Around 13,500 Bank of Ireland customers will be hit by mortgage rates hikes from 1 May 2013. These customers signed up for mortgages that track the Bank of England rate, some of which were ‘lifetime’ trackers.
Many residential mortgage customers will see their interest rate increase to 2.49% above the Bank of England base rate. And there’s a further sting in the tail when the rates bump again in October to base rate plus 3.99%.
And those renting out their properties will not escape the rate increase. Affected buy-to-let customers will see their interest rate increase even further, to base rate plus 4.49%.
Now, considering the Bank of England base rate has stayed at 0.5% for more than four years, it’s difficult to imagine how customers expecting their mortgages to ‘track’ that rate could have foreseen the Bank of Ireland rate rises. And we think burying such important changes in the small print of mortgage terms is wholly unfair.
Return of the killer clause
Bank of Ireland announced the increases at the end of February, saying it was making use of a ‘special condition’ in its mortgage contracts. Many Bank of Ireland customers are probably unaware of this specific clause buried deep in the small print – especially considering that everyone affected took out their mortgages in 2004 or earlier.
We’ve received a lot of correspondence from angry Bank of Ireland customers who think these increases are unfair and unjustified.
And it’s precisely the reason we called for a strong financial watchdog to make sure all banks communicate important clauses to their mortgage customers. We want the government to make sure there’s greater protection for bank customers from unfair terms and conditions via the Consumer Rights Bill.
Complain to Bank of Ireland
We’ve created a free online tool that makes it easy for you to complain directly to the Bank of Ireland in a matter of moments.
Are you one of the 13,500 affected Bank of Ireland customers? Were you led to believe your interest rate would track the Bank of England base rate for the full term of your mortgage? Or does your mortgage have ‘life’ or ‘lifetime’ in its name? If so, we think you should complain.
UPDATE 21/05/2013: The Bank of Ireland has decided to partially withdraw a rate hike that would have affected 13,500 tracker mortgage customers. 1,200 of the affected customers are to have their rate increases cancelled. However, the move still leaves more than 12,000 customers with a steep rate hike.