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Thousands to experience rise in Mortgage Rates from BOI

Thousands of borrowers who took out tracker mortgages with the Bank of Ireland (BOI) will see their rates increase from Wednesday, leading to a barrage of official complaints.

The change in rates will affect around 13,500 homeowners, most of which are landlords who bought on a buy-to-let basis. However any complaints are set to fall on deaf ears as BOI says that customers were warned that the fact that their rates were subject to change in the terms and conditions when they applied for the mortgage.

Despite this, there have been calls from lawyers for those affected to make official complaints to both BOI and the Financial Ombudsman Service, in a move which could see those affected compensated.

Those who applied for the tracker mortgages, which in some cases were called “lifetime trackers”, were told that their rates would track the Bank of England base rate, plus a margin. However despite the fact that the base rate has remained at a record low level for the previous four years, BOI are increasing the margin on top of this rate that most customers presumed would remain the same.

Mr Smith from Colchester in Essex applied for a mortgage with BOI in 2004. The rise in rates will mean that he faces paying £280 more this month, and a further £200 in October. He told BBC News: “It was sold and marketed as a tracker rate. I thought I had that margin for life, it’s all very frustrating”

BOI has said that the clause “was clearly referenced in the pre-sale offer document provided to the customer”. The provider has said the main reasons for the increase are the costs involved in providing such mortgages, as well as needing to maintain greater levels of capital within the company.

If you have been affected by issues raised in this article and would like advice on your options, please do not hesitate to contact our advisors who will be happy to help

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