Bank of Ireland UK doubles tracker rates
Bank of Ireland has effectively removed it’s UK customers from their tracker mortgages, increasing the mortgage interest rate, citing hidden clauses in their terms and conditions according to this UK press article.
This may be is a sign of things to come for Ireland as the tracker mortgage has become a loss maker for the banks, has been a common topic of conversation in Irish media over the last 6 months.
The bank states that “This increase is permitted by a specific clause in these mortgage contracts, which allows an increase in the interest rate differential after the guarantee period (i.e. after 31 December 2006).” However ,if this was valid and the banks had been losing on these trackers since the crash, then why has this not been tried before? This would make one feel that perhaps this is well worth people challenging the bank on this in court. The media suggest only “complaining” about it, but when did the banks ever listen to us complain?
The solution to this may be in a challenge in contract law. It may be very difficult for the BoI to enforce this on tracker holders if they are challenged in court as in most of these contracts it states clearly and categorically that the tracker mortgage is for the life of the mortgage and that it is set at 1% above the ECB standard rate. This is usually very clear and even includes a schedule of payments for the life of the mortgage.
Any hidden clauses might only be relied upon if they are not deemed contradictory to another clearly stated clause, and so if this does find it’s way to Ireland it may be wise to check your mortgage agreement and do not be afraid to challenge this because any change to the terms of a contract must have your prior agreement, and if it doesn’t have your prior agreement then you are not obliged to accept a change to a contract.
We do not give legal advice but we suggest that people look very closely at their tracker mortgages before they accept this at face value. After all banks have been known to be, shall we say, a little frugal with the truth in the past.