Couple challenges if banks can hike mortgage interest rates
The High Court has asked the Financial Services Ombudsman if a bank is allowed to increase mortgage interest rates at times when the rates set by the European Central Bank are historically low.
It has come about from a case taken by Kenneth and Donna Millar, who have seven mortgages with Danske Bank - all on standard variable interest rates - dating back to 2005.
Last year the Financial Services Ombudsman found under its loan agreements Danske was allowed to hike interest rates to more than 4% at a time when ECB rates plunged to almost zero.
Danske argued that it does not receive ECB funding, and so the cuts were irrelevant.
However, the Millars complaint will now have to be reviewed by the Ombudsman following a High Court ruling, which found a clause in the bank's loan agreements - that interest rates are altered "in response to market conditions" - to be ambiguous.
