Bank changing fixed rate after I signed mortgage offer

I took out a mortgage last year, I got a offered a special low 1 year fixed rate with my bank, which then switches to a tracker rate after 12 Months.

The letter of offer from the bank, specified the exact rate for the first 12 Months together with the amount to be paid each Month.

I signed the letter and sent it back.
By the time my mortgage closed and was drawn down, the ecb rates had gone up. As a result the bank are charging me a different fixed rate than was offered and signed on in the offer letter, i.e. they have added 50 or 60 quid a month to my repayments.

Can they do this?, is this normal.
I woudl have thought that once a get a formal offer and sign on it, the fixed amount and rate contained in the letter should be honoured by the bank.

Thanks

I'm afraid they can do this. They take the fixed rate at the time of draw down of the cheque.

I would've thought that the rate is fixed at drawdown.

Fair enough! Thanks for your help.

Did you check the detailed terms & conditions of the offer? Chances are one of them covers the possibility of ECB rate changes having a knock on effect.

As the loan offer is usually valid up to six months, the rates apply from drawdown only. The lender will have this covered off in the T&Cs of your loan offer.

Hi,

I had a similar query with AIB, they have a clause that their rate is valid for 45 days.

However they do not keep you informed of rate increase pre-drawdown. Its a sneaky way of doing business because it doesn't give you the oppurtunity to shop around for the most competitive rate.

I think you should get the opinion from the financial ambudsman.