The Financial Conduct Authority is to scrutinise the subject of mortgage contracts in the wake of the furore over the Bank of Ireland’s decision to hike its tracker mortgage rate for 13,500 borrowers.
The rate rise, from Bank of England base rate plus 1.75% to base rate plus 4.49% for buy-to-let borrowers and to base rate plus 2.49% for residential borrowers, affected some 13,500 customers.
Borrowers reacted with fury, while around 300 buy-to-let borrowers are contemplating a class action.
The regulator has now decided to issue a consultation paper on fairness in mortgage contracts, although it has not given a date of publication.
Minutes of an FCA meeting say: “The executive recommended publishing a discussion paper inviting comments about the best way to balance firms’ contractual rights and consumers’ reasonable expectations, and communicate the way in which the FCA might intervene to prevent firms from varying their mortgage contracts against reasonable expectations.”
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