The decision by two mortgage lenders to increase their interest rates on their tracker mortgages is to be looked at by the City watchdog.
Both West Bromwich Building Society and Bank of Ireland announced that they would be hiking up the charges for the product.
Some customers are now planning a legal challenge against West Bromwich – after they found out their rates would increase by two per cent from December 1st.
Around 6,700 consumers with buy-to-let mortgages will be affected.
The news comes as a surprise to many, considering the Bank of England’s interest rate has remained at a record low of 0.5 per cent for over four years now.
According to the building society, it has had to raise charges from an initial 1.99 per cent above the base rate of interest in response to an increase in the funding costs of such mortgages.
The Financial Conduct Authority (FCA) has now admitted that an issue of fairness needs to be addressed.
It had previously refused to get involved, as the buy-to-let sector of the housing industry is not regulated.
