Huge increase in interest rates

M

moycullen14

Registered User
Messages
17
Hi,

Professional partnership, largish property backed loan. One of the big two banks wants to increase interest rate (loan is performing, interest only) from 2.5% to 5% (4% margin over ECB). Anyone else had this happen lately? Strategies to combat?

TIA
 
On the basis that you are keeping to your original agreement with them then they have no basis for increasing their margin...
 
On what basis are they looking to increase. Is a fixed rate maturing?
 
Loan is up for its annual review. In the T&C, they reserve the righto change the rates and conditions. My only option, I guess, is to not sign the renewal, then what?

There is nothing strange in the loan. I guess that lots of people will be subjected to this on renewal. Has it happened to anyone else and does anyone have strategies for dealing with them?
 
I've come across a few people in this situation, and they have ceased paying the loan after the bank upped the interest rate after renewal.

While it caused some headaches, the loans in all cases were then renegotiated. Basically, the increase came from the Dublin HQ, the borrower stopped paying, and after a few months of letter back and forth, Dublin HQ passed it back to the local branch to negotiate a suitable agreement.
 

This doesn't add up - for example - say a ten year loan - one will have signed an original letter of offer, if the loan is being repaid as per that contract, then the bank should have no right to increase their margin, while they may review the loan on an annual basis, this does not mean they can change the original terms and conditions, especially if you are adhering to the original deal...
 
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