1,200 get BoI rate rise reprieve
In February BoI notified 13,500 UK mortgage customers of its intention to raise the rates despite the Bank of England base rate remaining unchanged.
However the BoI has now written to 1,200 of the 13,500 homeowners to tell them that the increases will no longer be applied in their cases.
The customers that will avoid the hike fall into two groups. The first is made up of 1,000 homeowners who were using flexible facilities on their mortgage account and “received a specific administrative letter linked to their transactions that might have caused some customers to believe the differential was for the term of their mortgage.”
The second group of around 200 customers were those who had switched their mortgage to a base rate tracker. The bank said this group received documentation saying rates could change but their mortgage conditions did not detail the circumstances under which this would happen.
Des Crowley, chief executive of Bank of Ireland UK, said: “We have said from the outset that we will review all customer complaints individually and that we are committed to treating customers fairly throughout the process. It is on this basis that we have removed these customers.”
The bank also said the Financial Conduct Authority was “supportive of our approach in excluding these customers.”
However some 12,000 customers of the BoI, many of whom had taken out loans with the BoI’s subsidiary Bristol & West, facing a steep rate hike despite the Bank of England rate having entered its 50th consecutive month at 0.5%.
The BoI’s decision to increase the rates has raised the spectre of possible legal action against the banks.
Earlier this month consumer group Landlord Action said it was in the process of investigating the possibility of legal action against the Bank.