Treasury Committee chairman writes to FSA about Bank of Ireland mortgage rises
Andrew Tyrie wants to know the financial regulator's thoughts on the increases in the bank's base rate tracker mortgages.
Andrew Tyrie, the chairman of the Treasury Committee, has written to regulator the Financial Services Authority (FSA) about Bank of Ireland UK’s decision to increase some tracker mortgage rates.
This is because the bank is invoking a clause in the mortgage contracts that says it can increase the so-called ‘top-up’ element of the mortgage rate. This is the part of the overall interest rate that isn’t linked to the Bank of England base rate, which has remained at 0.5% for the past four years.
The rate for residential customers, who own just their own home, will rise from base rate plus 1.75% now to base rate plus 2.49% from 1st May. It will then increase again to base rate plus 3.99% from 1st October.
Meanwhile, buy-to-let customers will see their rate increased to base rate plus 4.49% from 1st May from its current base rate plus 1.75%.
Mr Tyrie’s letter has reportedly asked the FSA to consider whether these mortgages have mis-sold and whether the mortgage contracts contain unfair clauses.
Around 13,500 customers, mostly with buy-to-let mortgages, are affected by the changes. Bank of Ireland has said customers can switch to a different lender without incurring an early repayment charge.
Mr Tyrie has given the FSA until today (Monday) to respond to his letter.
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Hi MK22, Bank staff are nice people, after all, we are all human beings like your good self. Some bankers however, are not nice people and I hope it is to that type of banker, to whom you refer? If there were no finance system a.k.a. banking, then I believe we'd be back to the 1700's bartering livestock and other commodities. Then of course, we'd have brokers and traders who also are said to manipulate the markets and receive stupidly unacceptable bonuses. Talking of bonuses (and it is the season that Bank's report their results and hence bonuses come to the fore), does anyone begrudge the John Lewis staff their bonuses that have been noted in the media? If not, then I wonder why my customers love to make comments to me - as a Bank Manager - about bonuses? They do receive a shock though, when I tell them that the Bank has not awarded any bonuses to my department for the last 10 years, even though the work my colleagues and I do, earns them £££'s in impairments.
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Never thought I'd be glad that Bank of Ireland sold on my lifetime tracker in 2011, but was relieved to receive a letter from the new lender reassuring me that they have no intention to change their interest rate.
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I'm sure someone will come on and explain why it is that banks are such nice but misunderstood people and we desperately need to keep them.
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12 March 2013