Bank Of Ireland Doubles Mortgage Rates, Homeowners Fear More To Come

Tyler Durden's picture

With the Bank of England cutting its wholesale interest (bank) rate to historic lows and now the ECB slashing 50bps off its key rate (as well as remonstrating on the reduction in fragmentation across European nations), it is perhaps perplexing (or simply too obvious) that a bank would raise its mortgage rates. As the Daily Mail reports, government-owned Bank of Ireland (BOI) doubled mortgage rates for 13,500 customers in the UK leaving homeowners with huge increases in their monthly payments. The bank, exploiting small print in the legacy mortgage contracts, will hike the interest cost for 1-in-14 homeowners from 2.25% to 4.99% (raising the spread over the bank rate on these loans from 1.75% to 4.49%). Anger is rife as customers complain "it's all very frustrating," adding that they thought this was a 'tracker' mortgage but BOI defends their massive rate hike on increased funding costs and the need to maintain higher levels of capital. The disconnect between wholesale gorging provided by the Central Bank and wholesale gouging of the real economy grows ever wider it seems.


Via The Daily Mail,

Thousands of homeowners are facing a huge increase in their mortgage repayments after the Bank of Ireland doubled rates overnight.




... will affect some 13,500 UK customers,




Which? accuses BOI of justifying the changes on the basis of 'clauses buried in the small print of mortgages' which were taken out before October 2004.


Which? executive director Richard Lloyd said this was 'wholly unfair' and said BOI was 'taking advantage of its customers by hiking rates at a time when the base rate is static'.




A typical change will see a buy-to-let mortgage holder who is currently on a rate of 2.25% - made up of the base rate plus 1.75% - see it rise to 4.99% from today, representing the Bank rate plus 4.49%.


For residential customers, changes will be introduced in two stages. From today, they will pay the Bank rate plus 2.49%. On October 1, it goes up to Bank rate plus 3.99% - currently 4.49%.




He said: 'It was sold and marketed as a tracker rate. I thought I had that margin for life. It's all very frustrating.'


BOI blames the rise on increase funding costs and the need for banks to maintain greater levels of capital. It has set up a phone line for anyone worried about the impact of the changes.


The changes affect seven per cent of BOI's UK mortgage customers, the lender has said.




'This clause was clearly referenced in the pre-sale offer document provided to the customer and the customer's intermediary prior to completion.'


It said customers were free to move to other providers and no early repayment charges would apply.


However tightened mortgage criteria and falling house prices may mean some struggling to find new deals.



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firstdivision's picture

Oh Ireland, it has been awhile since you were a subject on peoples minds.

Also, those long NG are feeling a sting today.

Sudden Debt's picture

well... over here the rates on a variable loan are 1,32% and fixed are that 4.7%

The smart people took the 4,7% loans and the other 99,9% took the variable loans....



InvalidID's picture


 Seems to me the Irish are giving the Brits a taste of what the UK has been serving up for hundreds of years. Way to go BOI, stick it to those Limey fucks.... LOL

token's picture

Banks, Bankers, Fed, Bernanke, Central Banks, TPTB, ETC   ?   Sperm Burping Gutter Sluts.

markovchainey's picture

That's an insult to sperm burping gutter sluts...they at least provide a valuable service...

max2205's picture

Cyprus'd in fucked up is that


Banksters will get it out of all of us, one way or the other

natronic's picture

Not as long as I keep socking it away at an ever increasing rate in PM.

JimBowie1958's picture

An Englishman, and Irishman and a banker sat down at a bar who had a rookier bartender. And the rookie made some major mistakes, overlooking a fly in each of the beers she served the men.

The Englishman stood in disgust, dropped a few Euros on the bar and left without a word.

The Irishman flicked the fly out of his suds and started drinking like nothing happened.

The banker gently picked up the fly between his thumbs and index fingers and yelled, 'SPIT IT OUT RIGHT NOW! SPIT IT RIGHT THIS MINUTE!'

ziggy59's picture

The friggin banksters always either refer to the fine print, actually microprint, or change the rules when convenient..

Manthong's picture

Default is the one thing they let technically happen every day (for them) but will not officially acknowledge.

the secret to busting the bastards if for everyone to commit to default.

Frastric's picture

Yet more muppets being fucked over...

Sudden Debt's picture

they trusted the bankers... MORONS!!

I just can't feel pitty for those people. They knew better than reality.


Bobbyrib's picture

Personal Finance 101- Do not take out adjustable rate loans.

nowhereman's picture

As the article states, these mortgages were taken out prior to 2004.  You know, back when we were all told to get into real estate before it's too late.  Back when we all, and I include you, believed that bankers could be trusted.  Back before we actually found out how corrupt the system really is.  Hindsight is a wonderful thing, but 10 years ago things were very different.  Blaming the victims of this farce is a little callous don't you think?

Melin's picture

It was either stated in the loan documents people signed or it wasn't. 

Bait and switch advertising laws help guarantee that customers won't read the fine print.

shovelhead's picture

Are you really that gullible?

I had a bank in '80 said the only loan they would write was an ARM.

I said no thanks and walked out.

If you're going to walk around like a wide eyed child, don't buy anything.

InvalidID's picture


 You could trust the banks in early 2000's? Fuck, I'm not 40 and I remember the Savings and Loan BS....

The_Small_Lebowski's picture

not everyone is a well educated 'conspiracy theorist' like the in the know folks on here. most if not all of this trust was placed when Irelands Taoiseach (equivalent to english PM) was on record as saying the people who were calling the housing market a bubble should 'go hang themsleves'.


coming from the man who lit up the country with 'prosperity' it was no small comment!

earnulf's picture

Wait till the credit card companies start jacking up their "interest" rates, which according to the fine print, they can do at a moments notice

Mototard at Large's picture

I just received yet another credit card offer which would be tied to my frequent flier card.  (American Express)

While the offer and costs on the card where about average, including the 120 dollar a year fee, I noticed that the interest rate offered was 30%!!!!!

This is the highest credit card interest rate I  have ever seen.  Is anyone else seeing rates this high?


Annual Interest Rate

As a charge card, the balance must always be paid in full each month in which case $0 in interest charges will apply. Interest rate of 30% applies to each delinquent charge from the Closing Date of the statement on which that charge first appeared.

  • Earn up to 20,000 Bonus Aeroplan Miles. Receive 15,000 Bonus Aeroplan Miles after your first use of the Card, plus 5,000 Bonus Aeroplan Miles after you spend $1,000 in your first three months of Card membership.2
  • Earn 1 Aeroplan Mile for every $1 in Card purchases up to $10,0003
  • Earn 1.25 Aeroplan Miles for every $1 in Card purchases over $10,000 annually.5
  • $120 annual fee*

    Cognitive Dissonance's picture

    These rules are made for breaking. And that's just what they'll do. One of these days these rules are gonna walk all over you.

    <Apologies to Nancy Sinatra.>

    InTheLandOfTheBlind's picture

    never apologize for nancy.... that song was horrible... heck i knew a girl whose definition of hell was that song on repeat... 

    Tango in the Blight's picture

    "If you want a vision of the future, imagine these boots stamping on a human face - forever."

    Ancona's picture

    Sounds like it's time to start a "jingle mail" campaign. Let the pig banksters eat cake and see how they like it. Starve the beast.

    Hedgetard55's picture

    Not in Ireland. Recourse loans = debtor's prison for walk aways.

    Imminent Crucible's picture

    Doesn't Ireland have airports with outbound flights? Are there not boats to Southampton? Can you not hitch a ride with a Roma truck driver taking a load of hash to Amsterdam?

    shovelhead's picture

    You might hitch a ride carrying CASH to A-Dam.

    The hash goes the other way.

    101 years and counting's picture

    GDP crushing bailouts is bullish.

    prains's picture

    God's Work !, Glitchez

    Dr. Engali's picture

    It's sickening watching  these debt slaves around the world being held captive while they sit by and just take it up the ass. What in the hell is it going to take?

    AZLagun's picture

    I believe that is pronounced arse.

    prains's picture

    hope Ireland has lots of caves, that's where people will be living soon. somebody rise up already


    JimBowie1958's picture

    That  hike only affected 7% of mortgage holders. The prior 100% loss for bond holders was a small slice of the population too.

    The banksters are fucking people over one small slice of the demographic at a time.

    So fools think it is only happening to OTHER people and it will NEVER happen to them.

    Imminent Crucible's picture

    Irish house prices poised to fall. Further. Banks will fail. Again.

    Quinvarius's picture


    There is only one asset class worth holding in the environment.  It is the kind you can hide.

    css1971's picture

    They should simply get a mortgage directly from the European Central bank at 0.5%

    emmadavis's picture

    And the banks wonder why the general public view them as despicable organisations.

    GraveyardSpiral's picture

    Doc; unlike in times (era's) past, I feel this is the new normal.  Never before in the history of humanity have so many "distractions" accounted for the attention of the sheeple.

    Telemakhos's picture

    I wonder if we'll see more of this across Europe as banks move to Basel III reserve requirements.  More expensive for the consumer, since the supply of lendable capital gets reduced as more is moved into reserve, but healthier for the bank as an institution.

    On the other hand, how much of Europe can afford to hike mortgage rates?  Imagine what would happen if Spain jacked up its rates like this… all those loans would be lost like tears in rain.

    Kreditanstalt's picture

    LOANS don't pay the bills's all about central bank drip-feed and prop desk profits...

    Ribeye's picture

    Wilbur Ross owns a chunk if BoI,

    Charles Wilson's picture

    Never, ever forget that this is intentional and its purpose is to usher in Feudalism 2.

    1. In Cyprus, they raised Bidness Taxes and reduced available money to the Proles.

    2. None, NO ONE in the EU ever argued that perhaps the rest of the EU should LOWER their Bidness Taxes to match Ireland's Corporate Rate.

    It was always "Ireland should raise the CTR to "equalize" with the rest of the EU".

    This is, and always was about the Rise of State Power, whether called National Socialism, International Socialism or Choom for Everyone.

    "Making the World Safe for Fascism."



    JimBowie1958's picture

    Of course they wont call it 'feudalism'.

    They'll pick some harmless saounding phrase like 'Happy, happy communal bail-in Nirvana.'

    Makes me sick to even type it.

    buzzsaw99's picture

    With the Bank of England cutting its wholesale interest (bank) rate to historic lows...

    BOI defends their massive rate hike on increased funding costs...


    Bobbyrib's picture

    England is not using the Euro as it's currency. They do not have to worry about the ECB bailing them out. Much like the US, they can digitilize currency on their own. I'm not defending what BOI did, I'm just stating it is like comparing apples and oranges.

    Kreditanstalt's picture

    Hahahahahahahahaha...!     FUNDING REALITY SHINES THROUGH THE ARTIFICIAL CHEAP MONEY....!  No sympathy for those getting artificially-cheap mortgages on the back of all the rest of us...WE pay for their mortgages through financial repression.

    JimBowie1958's picture

    Refi's are dirt cheapo right now, so why dont you get one and stop hating those of us who do as the market allows?

    LawsofPhysics's picture

    For those carrying fixed rate mortgages might I suggest taking a closer look at your initial contract and perhaps also asking one simple question, show me the note motherfucker!  Fuck the mother fucking paper-pushers, they create nothing of real value and live solely by skimming real value from the fruits of your productive labor.  Fuck em, let it burn.

    john39's picture

    there is a very good reason that all of the major religions at one time forbad usury...  should be more than obvious by now.   what is less obvious is how that prohibition was removed in two of the three major religions... and why the odd man out is under constant attack by the money changers.