Bank of Ireland criticised over UK tracker mortgage rate increaseWednesday 01 May 2013 22.58
Bank of Ireland has come in for criticism from consumer groups in Britain over its decision to increase interest rates on around 13,500 tracker mortgages from today.
The bank said that the tracker mortgages, which were sold before 2004, contain clauses which allow it to increase the margin over the Bank of England base rate.
Some customers will see their interest rates increase from 1.35% per cent to 2.99%.
Tracker mortgages normally follow the base rate set by a central bank in a particular jurisdiction.
The current Bank of England base rate is at a historical low of 0.5%.
Customers have complained that they thought they were taking out lifetime mortgages that would always have the same margin.
The rate increases will also apply to customers at Bristol and West, which is a Bank of Ireland subsidiary.
Andrew Tyrie, the MP who chairs the Treasury Select Committee, has written to the UK's Financial Services Authority asking it to investigate potential mis-selling.
He has asked the head of conduct at the FSA if it is to examine whether the Bank of Ireland mortgage agreements contained unfair clauses.
"We need more information to be confident that the regulator has thought carefully about this issue," said Mr Tyrie.
"It must exercise judgement to ensure that customers are being treated fairly".