another Bank of Scotland increase on tracker mortgage

Hi
This thread isnt a query, I just wanted to share my experience with BOS in case it helps somebody who is in the process of choosing what lender to go with.

I started loan proceedings with BOS 2-3 months ago and I should be drawing down the loan in a few weeks (there were a few delays). Since the start point BOS have raised the rate over the tracker twice and whilst other banks have also raised rates it seems that BOS are the only ones to have applied it to people already in the loan process. If I had to start this procedure again I would run a million miles from these guys. In fact AIB are still offering me the same rate 2-3 months on but I just dont think I have enough time left to feasibly change lenders.

There have been several recent threads about people having their approval in principle loan rates reviewed upwards before drawdown. It's not that unusual. Are you sure that BOS are the only ones to do this recently?

Well thats my understanding from talking to the mortgage broker.

We have had the same problem with ICS and as far as I know they are increasing them again on Monday - we are not due to drawdown for another 2 - 3 weeks

IIB Homeloans have also raised their rates several times in past few months and new rates apply to existing applicants.

Is the broker suggesting you change to another mortgage provider?

yes

be aware that in the last few months some mortgage providers have changed their broker commission structures. You should satisfy yourself that this is not influencing the brokers decision.

I'm not suggesting it is the case, but I suspect that might be your concern?

I could have wrote exact same post as OP, its not nice but i am too far along to change lenders now.

so who has the most competitive rates now for 95% os so they claim right now today

Unless you're in the "professional" list of occupations (solicitor, accountant, doctor and others) you won't get 95% from any lender any more. So if you have a loan offer at 95% and it's still valid and you really do want to borrow 95% in today's market, stick with the offer you've got.

I have decided not to change owing to time restraints but I can tell you that the tracker mortgage I was getting (LTV 49%) is now currently priced higher (5.6%) than the same banks 3 yr fixed rate (5.1%). Is it that BOS do not want borrowers to take out a tracker. I had thought that I was being offered a tracker in the first place was because I was a safer bet. Also since I last looked at AIB 3 months ago the tracker rate has remained static - I choose BOS as AIB didnt want to offer me a 30 yr term and for the next few years I wanted to keep my repayment levels down. If I had more time I wouldn't think twice about going with AIB.

when tracker mortgage rates are announced as "going up" are they just going up by the same amount as the ECB rate is goign up, or are the now adjusting the minimum difference between tracker rate and ECB rate???

I switched to tracker thinking "I will ALWAYS be x% above ECB" but is the case that they can change this and I can be y%"??? surely this is then just a variable rate in effect??

Hi, the x% has changed twice for me but if you have already drawn down the loan they cannot do this. I am annoyed as apparently its been traditional for banks to only apply higher x rates to new applicants. I understand that they can change the rate for people who have drawn down the loan by changing from the ECB rate to some other alternative european rate whos name escapes me right now but it is limited to these two values.

Euribor?

Sounds right,
I am not sure that every loan's terms and conditions allow the bank to change from ECB to Euribor and I think that where T&C's do allow change of rate they usually stipulate that they can only implement that changover where the euribor is n% higher than the ECB rate.

I saw the following explanation on ECB, Euribor and trackers on boards but cannot say how accurate it is
"Banks are withdrawing Tracker Mortgages as a product because EURIBOR is no longer tracking the ECB rate. They used to track each other, +/- 20 basis points. The Credit Crunch has pushed up EURIBOR while the ECB rate is unchanged. As banks have most of their funding linked to EURIBOR, they are not making any money on existing trackers"

Bank of Scotland is not the only bank to change mid loan process and I don't agree that it is not unusual. It is not unusual to change rates but it is unusual to send a letter of offer which is accepted by the client and sent and then when the cheque is drawn the rate has completely changed sometimes with notice, sometimes not. Usually once you have agreed an offer and signed the letter of offer the bank would comply with this but in the last few months the banks have not been doing this and changing with little or no notice. Bank of Scotland, first active, bank of Ireland, ICS, IIB Homeloans, haven Mortgages, EBS, have all done this so it is not just bank of scotland. I have been dealing with people who have been purchasing houses letter of offer sent to the Bank and then two days before closing the bank pulls the offer (fixed rate - First Active), they send another one (higher rate variable) so the person can still buy the house - but at a higher cost and with delays to closing the sale. Bank of Scotland unfortunately are not in the minority in their behaviour