The head of the National Landlords Association has hit out furiously at the Bank of Ireland’s decision to hike increase rates for some 13,500 mortgage borrowers.
Chief executive Richard Lambert warned that the rise could trigger repossessions, making tenants homeless.
Bank of Ireland customers – of whom buy-to-let customers will bear the immediate full brunt of the increases – have tracker mortgages and, on online forums, some say the rise will add as much as £500 to their monthly mortgage payments.
Worst hit will be those landlords with several Bank of Ireland mortgages, and who may now find that the rental income will not cover the mortgage costs – in contravention of the lender’s own rules.
A buy-to-let mortgage holder who is currently paying 2.25%, made up of the Bank of England Base rate plus 1.75%, will see their rate climb to 4.99% from May 1.
Bank of Ireland says the average monthly increase will be £145 a month.
Residential mortgage customers will see their rates jump to 4.49%, but in two phases – on May 1 and October 1.
Lambert said: “The NLA is dismayed that any lender is prepared to introduce such a substantial hike in its tracker rate without considering the impact that it will have on borrowers’ ability to meet the cost.
“This represents a substantial increase in the payments landlords will have to make on a monthly basis and is likely to have an enormous impact on their businesses and the security of their tenants’ homes.
“At best, the provision of homes will become more expensive, at worst, this may lead to repossessions and homelessness.
“The Bank of Ireland appears to be cynically attempting to clear their buy-to-let mortgage book by forcing through unsustainable interest rate increases at a time when landlords and tenants are most stretched.”