Northern Ireland South West

Bank of Ireland: ‘Complain if you’re unhappy about tracker rate hike’

Written by RLA

The Bank of Ireland (BOI) has responded to a formal complaint by the RLA, following the bank’s decision last month to hike its tracker rate for buy-to-let customers with effect from May…

The Bank of Ireland (BOI) has responded to a formal complaint by the RLA, following the bank’s decision last month to hike its tracker rate for buy-to-let customers with effect from May. 

In a letter to the RLA, Mike Joyce, BOI’s director of UK consumer banking, claimed the bank had not made the change to its tracker rate “lightly or without careful consideration”. Mr. Joyce stated that the decision had been “scrutinised internally” and that the bank had, “…engaged extensively with both the Prudential and the Conduct arms of the FSA before deciding to implement the change.”

Mr. Joyce claimed the changes were required because of the increasing cost of providing the service and that the changes, “…bring the rates into line with Buy to Let rates that are available to customers in the wider market.”

Mr. Joyce also confirmed that the hike will affect 8,000 BOI customers with mortgages obtained prior to 2004, and has only been applied to, “…those accounts where the terms and conditions clearly permit.”

As a concession, Mr. Joyce stated that no early repayment charge would apply to any customer who chose to move their loan to another lender. He also stated that BOI would assist any customers experiencing hardship caused by the changes and “work with them to mitigate the impact of the rate increase”.

In conclusion, Mr. Joyce stated that any customer who wished to complain could do so, and reiterated customers’ right to take their complaint to the Financial Ombudsman.

The BOI’s response came following the receipt of a letter of complaint by RLA chairman, Alan Ward, last month.

In his letter, Alan wrote, “We are extremely disturbed that conscientious landlords, who are customers of the Bank of Ireland and your division Bristol & West, will find the sharp increase unfeasible – leading to the increased potential for defaults and repossessions.

“Many of the landlords affected will have had hitherto excellent credit ratings; and, whilst we are more than aware that interest rates go up as well as down, this hefty hike in the tracker rate will effectively leave them financially high and dry.”

Alan also questioned the Bank of Ireland’s lack of ambition to support the burgeoning private rented sector, stating, “We are concerned that the Bank of Ireland does not recognise the potential of the private rented sector; and, instead of pursuing short-term targets, should consider the long-term benefits of encouraging a growing sector of the housing industry.”

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The Residential Landlords Association (RLA) represents the interests of landlords in the private rented sector (PRS) across England and Wales. With over 23,000 subscribing members, and an additional 16,000 registered guests who engage regularly with the association, we are the leading voice of private landlords. Combined, they manage almost half a million properties.


  • We had a similar problem with Norwich & Peterborough. They increased our tracker rate from BOE + 0.99% to BOE + 3.4%. This happened a few years ago, but I am angry at that Norwich & Peterborough have been irresponsible at running their bank and making customers pay for the lending mistakes. In our case it is a bit of grey area, as the SPECIAL CONDITIONS clearly state the rate can only be BOE + 0.99%, but N&P are using conditions elses where in their terms & conditions.

    I believe we have a case for misselling, because N&P did not tell up up front they can change the terms of the tracker mortgage. We would have gone elsewhere.

    It is costly to get legal advice….

    • Your Norwich & Peterborough experience sounds very similar to mine with the BOI/Bristol & West.

      The clause that has permitted them to hike the rate, which we thought was a pure and simple tracker rate, was buried in a document referred to in their terms and conditions rather than in the T&C document itself. Not even sure we received the supporting document in question when we took out the mortgage in 2005. Certainly don’t have a copy of it on file ( and we keep most thinsgon file).

      Anyway, our tenant is a single, working mum with 3 children who has been in arrears for almost 2 years. With careful payment plans we have been able to keep the tenancy going. Then we received the letter from BOI. So far it has led to time spent on phone calls to the RLA, the benefits office and the housing department to decide whether we can sustain the tenancy. The only option is for us to put the rent up by over £100 per month to the maximum allowed for a 3-bed property under benefit rules, in turn costing tax payers more money.

      I sincerely hope that:
      1. BOI/Bristol and West recognise the impact of their decision;
      2. Take note of the consequences of their action, and
      3. DO NOT award pay increases or bonuses to staff of whatever level to deomonstrate that they are not simply using their customers to balance their books, but are prepared to make sacrifices themselves, with those at the very top leading the way.

  • Same has happened to me with N & P they increased mortgages on SEVERAL of my properties a while back evoking what they termed as a “special clause” withdrawing link to BBR. Even worse MANCHESTER BUILDING SOCIETY are going to do the same in May with a staggering 5.49% increase of £207.85 per month! Is it a case of mis-selling – is there Anything that can be done I am SO ANGRY at them!

  • Having 2 mortages effected by the rate hike I will be £399.63 worse off each month.
    As a full time landlord this represents a 30% reduction in income.
    How many individuals or businesses can afford such a drop?
    With tenants on benefits it is impossible to increase rent at all never mind to cover the loss. It wont be long before mortgage defaults occur.
    if properties get repossessed BOI increase there backup funds instantly, the main reason they gave for increasing the rate. They are on a win win situation.
    Having purposely chosen there product to give me the security in needed, I feel totally let down and vunerable.
    I think their decision is immoral.
    Having been a mortgage advisor in the past, it wouldnt surprise me if that now that the profit they are gaining has increased so much, that their mortgage book is sold on to another lender completely, which is how they got their hands on them to start with!

  • I too have been subjected to a hike in mortgage rate.I became a BOI customer following their take over of my previous lender. They do not appear to be in financial difficulty,when then should I be subjected to increased lending fees ?

  • I would also be interested in pro-forma letter to send to Norwich & Peterborough and particularly MANCHESTER BUILDING SOCIETY. Not sure if it will get us anywhere though – wrote to my MP and Vince Cable, secretary for Business but just received bog standard replies. The banks as usual seem a law unto themselves. Someone please help, they are really big increases! Would it be better for rla to get us to sign some sort of petition I.e. power in numbers?

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