The trouble with banks (or one of the many troubles with banks when it comes to property investment) is they put on a smiley face when they want your business, but have no qualms about riding roughshod over you when it suits them, as thousands of property investor borrowers with the Bank of Ireland found out to their costs yesterday, when they saw their tracker rate mortgages double over night.
Rates for buy-to-let and some residential customersÂ who are currently paying 2.25% will rise to BBR plus 4.49% in May. Many regard this as showing a blatant disregard for their customers.
According to a letter sent to the banks customers, the loan agreement has a special condition (no doubt hidden in the small print no one reads) which allows them to change the tracker differential for a number of valid reasons.
Many mortgage agreements also (unbeknownst to many borrowers) have clauses allowing the bank to call in the loan at any time subject to certain conditions.
Itâ€™s for reasons like this that we at The House Crowd wanted to create a different wholly transparent business model for property investment enabling both us and our investors to profit without being at the mercy of banks.