Tracker mortgages 'were not clear'

The Financial Services Authority has been criticised for failing to take action over plans by Bank of Ireland to double the rate of tracker mortgages.

The Irish bank is upping rates for its 13,500 customers on tracker loans pegged to the Bank rate which will see repayments more than double to 4.49% and in some cases rise fivefold.

Andrew Tyrie, the chairman of the Treasury Select Committee, has called on the regulator to investigate.

About 2.5 million homebuyers in Britain are borrowing on tracker mortgages and most assume that the cost cannot be lifted other than in the event of a rise in the interest rate. The Bank base rate has been unchanged at 0.5% for four years.

Andrew Montlake, Director at mortgage broker Coreco told the Today programme: "This is affecting all people who had mortgages before 2004.

"Lenders have a duty to communicate in a way that is fair, clear and not misleading.

"In this case, in my opinion, it wasn't clear and I feel that borrowers should come together and argue that."

First broadcast on BBC Radio 4's Today programme on Tuesday 12 March 2013.