Can bank change rate after loan offers are signed?

M

Missie

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Hi

We signed our loan offers from NIB on 21st July (at a rate of ECB +.6%)
We drew down the loan on 1st of August, which was the date of their rate increase. The subsequent letters from them state repayments at the higher rate (ECB +.9) Do they have the honour the rate in the offer or can they change to the new rate.

Incidently they have only increased the rate on our PPR mortgage, the investment mortgage we also took with them at the same time has stayed at the initial rate.

I'm hoping this is just an administrative error (waiting for NIB to get back to us)
 
Re: Can bank change rate afte loan offers are signed?

Usually the lender reserves the right to review the rate right up to the borrower drawing the loan down. Ask your solicitor and/or read the terms & conditions of the loan offer.
 
Re: Can bank change rate afte loan offers are signed?

Thanks
Yes, the solicitor reckons that there is always a clause like that in the offer but is still checking it out. The annoying thing is, when the offers were issued our branch person (on hols at the mo) pointed out that they were at the lower rate as they were going up soon.
I thought I read on here somewhere that NIB were going to honour applications received by a certain date - we were definitely within that.
We have incurred costs in changing from another lender, and with the new rates we haven't saved that much from NIB.
The other strange thing is that we weren't informed of a rate change - just a letter saying your repayment is x.
 
Re: Can bank change rate afte loan offers are signed?

Definitely worth reading the T&Cs so.
 
Re: Can bank change rate afte loan offers are signed?

The article you're thinking of is here
http://www.independent.ie/business/...e-switchers-hit-by-new-rate-rise-1435011.html

It states that Brendan O'Hora of NIB says " NIB said it would honour applications at the current lower rates until August 1, giving homeowners two weeks to move. It also said it would honour offers made in the next fortnight at the lower rate for up to three months."

I have an offer from NIB similar to yours at the old rate and would obviously be disappointed if they aren't going to honour it!
 
I smell a rat with this one. We never got the loan offers in the post - had to print them off in the bank in a hurry, the solicitor originally requested the draw down on 31st July, but NIB confirmed it would be am on 1st, which was okay - BUT that was the day the rates increased.
Did they deliberately stall the loan offer issue, and deliberately delay the loan drawndown???

I'll update later in case anyone's interested
 
Thanks for that link Getmoving. I really hope it's true and we're just experiencing an admin error on the part of NIB.
If so, I'll take back all I said above.
 
Hi Missie,

From my contact with the NIB manager I've been dealing with and my reading of the article, I understand that if an offer was made by NIB before the 1st August, then the older rates apply.

However, as Clubman says, the T&Cs say that the bank can then change, so it's quite possible that they aren't honouring this verbal commitment. Certainly worth arguing over anyway.

For interest, is it still worth your while making the switch if the less attractive rates apply, especially when you include legal fees etc?
 
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