Thousands of Bank of Ireland borrowers have been hit with a massive rise in their monthly mortgage bill this month. That's despite them believing they had taken out a lifetime tracker deal.
While the base rate remains at a record low of 0.5 per cent, some 13,500 people who had linked their mortgage rate to the Bank of England's official rate face payments rising by hundreds of pounds, even though the base rate remains unchanged.
Most of the people affected took out buy-to-let loans through the Bank of Ireland subsidiary Bristol & West, but that doesn't mean they have to take the rate increase.
Consumer group Which? is encouraging badly served borrowers to complain to the bank, and if they are not happy with the response to take the matter on to the Financial Ombudsman.
Which? executive director Richard Lloyd said: "Customers should complain if they were led to believe they had bought a lifetime mortgage and Bank of Ireland must deal with these complaints quickly and fairly."
A typical rise saw a buy-to-let mortgage holder on a rate of 2.25 per cent – made up of the base rate plus 1.75 per cent as part of the lifetime tracker – see it climb to 4.99 per cent from 1 May.
The bank blames the rise on increased costs and said: "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 (ie after 31 December 2006)."