About 13,500 customers have been affected by the Bank of Ireland doubling their mortgage rates.
The mortgages concerned are tracker mortgages taken out prior to 31 October 2004; the borrowers concerned believed they were on lifetime tracker mortgages.
The consumer group Which? have said the change is “wholly unfair” and group Landlord Action in association with Property118.com, has been investigating the possibility of legal action against the bank.
The bank has been in touch with all affected customers (7% of their UK mortgage customers) about the changes which took effect yesterday.
Which? recommends customers complain to the bank and if they are not happy with the response take the matter to the Financial Ombudsman.
They have created a free online tool to make it easy for consumers to complain directly to the Bank of Ireland, at www.which.co.uk/bankofireland.
The changes would 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%, representing the Bank rate plus 4.49%.
For residential customers, changes will be introduced in two stages. They will now pay the Bank rate plus 2.49%. On October 1, it goes up to Bank rate plus 3.99% – currently 4.49%.
The rate increases do not affect customers who have taken out a mortgage through the Post Office, which has a financial partnership with the bank.