Tracker rates rise
Thousands of Bank of Ireland and Bristol & West borrowers customers face a doubling of interest on mortgage interest payments this year after the banks decided to ramp up tracker rates.
Buy-to-let borrowers are being hit by a bigger hike than residential customers: they will see their mortgage rate jump to 4.49 per cent on top of Bank of England base rate - or 4.99 per cent compared to the current rate of 2.25 per cent (base rate plus 1.75 per cent).
Residential customers were also paying 2.25 per cent but face a smaller hike, to 2.99 per cent (base rate plus 2.49) on 1 May 2013. But the tracker rate will then increase again to 4.49 per cent (base rate plus 3.99 per cent) from 1 October 2013.
The move will add £240 per month, or £2,850 year on a £200,000 mortgage. Some 15,000 customers in total will be affected. In a letter to customers, the lenders – which are part of the same bank - state: 'Currently banks are required to hold more capital reserves, as part of measures to protect the banking system from the type of scenarios seen during the banking crisis.
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