@Whisper May I ask if this is a deadline imposed by Ulster Bank? Or is it just for your own peace of mind?
Key Post I have an Ulster Bank tracker – should I consider fixing?
- Thread starter Brendan Burgess
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@Paul F Hi Paul, a bit of both. I was told the rates would only be valid for 10 days from the date of the pack they send out as rates may change etc. I spoke to them initially on the 3rd, letter then didn't arrive until the 10th and was dated the 7th, so bit of a delay there. I won't get near a post office on Tues/Weds so wanted to get the pack sent back today (thought I would send it tracked but they had enclosed a prepaid envelope).
@Brendan Burgess Thanks very much for the feedback. Having thought about it I decided to go for the 4 year fixed. I really don't know what I will do with the inheritance, and as it is ultimately dependent on the sale of a house the amount could be either more or less. The breakage cost for the 4 year rate is €1495 and the 7 year is €1712.
Brendan Burgess
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They can't possibly know that at this stage.
To clear this up, it's unique to Ulster Bank terms and conditions. The numbers on the rate options letter are the MAXIMUM that the break fee will be in future. It's 6 months interest. If you want to break, they'll calculate the correct break fee, and cap at these figures.
Also, you only pay break fee on the amount you are repaying early, not the total balance.
Brendan Burgess
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Thanks for this clarification @RedOnion
This is the rate options page from my pack for your info @Brendan Burgess
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This has always annoyed me about Ulster Bank's break fee letters. There are numerous examples on here of people (unsurprisingly) being confused by the letter in the same way that @Whisper was. I wonder how many hundreds of people over the years have decided not to break and re-fix, or not to break and switch lender, because they thought the break fee was much higher that it actually was?
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BluefishGD
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Good Afternoon Brendan, I hope this message finds you well. Some time ago, back in Nov22 you gave me advice as I was looking for your professional opinion on my own details and wether it would be wise to move off my tracker and look at fixing.
At the time you advised, unless I secured a very good fixed rate at 7-10years, and even with that, then no it was not worth giving up my tracker especially due to the length of term.
As we all know things have drastically changed (for the worse I suppose) over the past 6 months with ECB regularly increasing its rate with word now to expect 2 more hikes in the coming month or so.
So I am just back to you with this playing on my mind and would really appreciate what you think with my details below:
1) Existing tracker margin: ECB + 1.05
2) Amount outstanding on your mortgage: €134,698
3) Remaining term: 24Yr 11 Mth
4) Lender: Ulster Bank (Ive been told will be moved to AIB but as of yet nothing from UB)
5) Value of your home: 220,700K
6) Might you trade up or overpay your mortgage? No
7) Do you face any barriers to switching? No
8) What rates are you considering fixing at? Don’t know - Just starting to look at what options are available, My LTV is I think at 61%.
9) Does your house have a high BER rating which might qualify it for a lower rate? No, built 2008.
Many thanks in advance.
At the time you advised, unless I secured a very good fixed rate at 7-10years, and even with that, then no it was not worth giving up my tracker especially due to the length of term.
As we all know things have drastically changed (for the worse I suppose) over the past 6 months with ECB regularly increasing its rate with word now to expect 2 more hikes in the coming month or so.
So I am just back to you with this playing on my mind and would really appreciate what you think with my details below:
1) Existing tracker margin: ECB + 1.05
2) Amount outstanding on your mortgage: €134,698
3) Remaining term: 24Yr 11 Mth
4) Lender: Ulster Bank (Ive been told will be moved to AIB but as of yet nothing from UB)
5) Value of your home: 220,700K
6) Might you trade up or overpay your mortgage? No
7) Do you face any barriers to switching? No
8) What rates are you considering fixing at? Don’t know - Just starting to look at what options are available, My LTV is I think at 61%.
9) Does your house have a high BER rating which might qualify it for a lower rate? No, built 2008.
Many thanks in advance.
Brendan Burgess
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So, with ECB at 3.75% , and probably will rise to 4% , you will be paying, say, 5%
My previous comment that you should not fix for 2 years or 4 years stands. Any short-term benefit is not worth losing your tracker for.
You can fix for 7 years as follows
So you save 0.9% in the short-term for losing the tracker for the 14 years following the 7 year fixed term.
Very hard to know.
We have since added the following question:
My gut feeling is that if you can handle the uncertainty over rate increases and handle the extra cost, you should stay on your tracker.
However, if a 2% rise would put you in difficulty, then fix for 7 years.
BluefishGD
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Good Afternoon Brendan, sincere apologies in delayed response. Again your advice and wealth of knowledge and experience is amazing and I really appreciate you taking the time to read and respond to my query and gives me a bit of clarity on future decision and will need to do some further research and way up the pros and cons. Many thanks
@BluefishGD
You'd be at the mercy of non tracker rates for almost 18 years after any 7 year fixed is up (I think Brendan misread the time remaining)
ECB will start dropping next year and they have stated their medium term target is 1.5%-2% and as a tracker hold you will benefit quickly when the rate changes revert.
Stick with the 1.05%
You'd be at the mercy of non tracker rates for almost 18 years after any 7 year fixed is up (I think Brendan misread the time remaining)
ECB will start dropping next year and they have stated their medium term target is 1.5%-2% and as a tracker hold you will benefit quickly when the rate changes revert.
Stick with the 1.05%
Hi Brendan,
Great to see some new posts in this thread seeing as EBC continues to rise. I wonder if you would mind reviewing your answer since i originally asked you to take a look last Oct? I have included info below updated.
1) Existing tracker margin. ECB + 1.15%
2) Amount outstanding on your mortgage €176199
4) Remaining term 23 years 7 months
5) Lender - Ulster Bank
6) Value of your home - €300000
7) Overpayment? (been overpaying €250 per month for few years. Apparently reduces term by 7 years to 16 ish years)
8) Do you face any barriers to switching? Single Income household now
9) What rates are you considering fixing at? Havent really looks into details yet
10) high BER rating Probably not - relatively new house. Approx 15 years but wouldnt say BER is very high
To be honest even though this continues to increase because I have 23.5 years left (16.5 years if I continue to overpay) I am still inclined to stick with the tracker. I hope not to be paying for 23.5 years taking me right up to retirement but it might be better to hold off on the overpayments for a while, rather that being left with 15+ years of uncertainly after any potential fixed packageI might move to runs into a variable rate
Your point above is interesting:
My gut feeling is that if you can handle the uncertainty over rate increases and handle the extra cost, you should stay on your tracker.
However, if a 2% rise would put you in difficulty, then fix for 7 years"
Seems to be extra €45 with every 0.5% increase in ECB for me so 2% is around €180 and I have been overpaying €250 as I said.
I cant help feeling that we have been very lucky for 10 - 15 years so small bit of pain now is not the end of the world if it can be absorbed as long as it will come down a bit to more reasonable level in a few years....
Thanks again
Brendan Burgess
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@ekuleo
I am assuming you are still with Ulster Bank and AIB has not bought your loan?
So you could fix for 3.95% for 7 years
That would leave you with about 15 years without the tracker.
Or you can stay on the tracker at 5.15% after last week's rise.
So you are paying 1.2% more in the interim for the "guarantee" of a tracker.
It's close, but as you are well able to handle any increase, I would tend towards staying on the tracker.
The fact that you are overpaying also supports staying on the tracker. It's less messy overpaying a tracker rate than a fixed rate.
Brendan
I am assuming you are still with Ulster Bank and AIB has not bought your loan?
So you could fix for 3.95% for 7 years
That would leave you with about 15 years without the tracker.
Or you can stay on the tracker at 5.15% after last week's rise.
So you are paying 1.2% more in the interim for the "guarantee" of a tracker.
It's close, but as you are well able to handle any increase, I would tend towards staying on the tracker.
The fact that you are overpaying also supports staying on the tracker. It's less messy overpaying a tracker rate than a fixed rate.
Brendan
Hi Brendan,
From reading this thread, I think I think I should hang on to my tracker. A joint mortgage taken out in 2006 with a 40 year term. I'm nearly halfway through paying it off and making overpayments as I don't want to be paying a mortgage post-retirement.
I like the ease of making regular overpayments, though not sure how easy that is going to be with AIB. The current process with Ulster Bank is very easy and all done in a matter of seconds online. From a brief look at AIB it seems that you have to lodge paper forms, urghh.
1) Existing tracker margin. – 1.15% + ECBR 3.75% = 4.90% (latest hike won’t hit till next months payment)
2) If you have an additional mortgage on the same property, what is the rate? n/a
3) Amount outstanding on your mortgage €167,174
4) Remaining term - 22 years, 6 Months
5) Lender – Ulster Bank (will be moved to AIB)
6) Value of your home €372,797 (LTV 45%)
7) Might you trade up or overpay your mortgage? – Currently overpaying €488.97
8) Do you face any barriers to switching? E.g., an impaired credit record, a mortgage with a warehoused portion due to a restructuring, reduced income since you took out your mortgage, you are now renting out the property. - No
9) What rates are you considering fixing at? I have no idea
10) Does your house have a high BER rating which might qualify it for a lower rate? Check it here or estimate it if necessary. – No, ex council, mid-terrace
11) How well could you handle a further 2% rise in the ECB rate? – With the amount we are currently overpaying I think we would manage and there is scope to cut costs in our budget elsewhere
From reading this thread, I think I think I should hang on to my tracker. A joint mortgage taken out in 2006 with a 40 year term. I'm nearly halfway through paying it off and making overpayments as I don't want to be paying a mortgage post-retirement.
I like the ease of making regular overpayments, though not sure how easy that is going to be with AIB. The current process with Ulster Bank is very easy and all done in a matter of seconds online. From a brief look at AIB it seems that you have to lodge paper forms, urghh.
1) Existing tracker margin. – 1.15% + ECBR 3.75% = 4.90% (latest hike won’t hit till next months payment)
2) If you have an additional mortgage on the same property, what is the rate? n/a
3) Amount outstanding on your mortgage €167,174
4) Remaining term - 22 years, 6 Months
5) Lender – Ulster Bank (will be moved to AIB)
6) Value of your home €372,797 (LTV 45%)
7) Might you trade up or overpay your mortgage? – Currently overpaying €488.97
8) Do you face any barriers to switching? E.g., an impaired credit record, a mortgage with a warehoused portion due to a restructuring, reduced income since you took out your mortgage, you are now renting out the property. - No
9) What rates are you considering fixing at? I have no idea
10) Does your house have a high BER rating which might qualify it for a lower rate? Check it here or estimate it if necessary. – No, ex council, mid-terrace
11) How well could you handle a further 2% rise in the ECB rate? – With the amount we are currently overpaying I think we would manage and there is scope to cut costs in our budget elsewhere
Brendan Burgess
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@MrFBzs
First of all, let's look at your options of fixing with Ulster Bank.
You can fix for 7 years at 3.95%
You can fix for 4 years at 3.7%
If you were to fix, then you should fix for 7 years as 4 years is too short a period leaving you with 18 years left on the original schedule.
So do you fix for 7 years at 3.95% or retain a tracker at 5.15%?
You are paying about €1,500 a month at the moment including the overpayment?
€167,000 @ 3.95% , paying €1,500 a month would see your loan repaid in about 11 1/2 years.
So after the fixed rate of 3.95% finishes in 7 years, you would have only 4 1/2 years to go with a rapidly declining balance. So losing the tracker would not be that significant.
I started off this post thinking you should keep your tracker, but it's close. It's still close, but if you expect to be able to afford €1,500 a month comfortably, then you should probably fix.
Brendan
First of all, let's look at your options of fixing with Ulster Bank.
You can fix for 7 years at 3.95%
You can fix for 4 years at 3.7%
If you were to fix, then you should fix for 7 years as 4 years is too short a period leaving you with 18 years left on the original schedule.
So do you fix for 7 years at 3.95% or retain a tracker at 5.15%?
You are paying about €1,500 a month at the moment including the overpayment?
€167,000 @ 3.95% , paying €1,500 a month would see your loan repaid in about 11 1/2 years.
So after the fixed rate of 3.95% finishes in 7 years, you would have only 4 1/2 years to go with a rapidly declining balance. So losing the tracker would not be that significant.
I started off this post thinking you should keep your tracker, but it's close. It's still close, but if you expect to be able to afford €1,500 a month comfortably, then you should probably fix.
Brendan
BluefishGD
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Hi @peemac sorry again for delay in response, I thought I had notifications set up on this but obviously not correctly and wasnt aware of your response. I really appreciate your insight and advice and its given me the reassurance I have made the right decision, for the time being and most likely into the future, to stick with my tracker. Many thanks.
@Brendan Burges
Hi Brendan,
Apologies meant to reply and thank you for the info again.
So yes since your response my loan has been purchased by AIB and I have also received a letter from them confirming the increase to 5.15%
I made the difference so far to be €376 since the increases started. Alot of money but I have been overpaying €250 as discussed so could stop doing this to offset some of that for a year or 2 until we see what might change. I always keep coming back to the fact I have 24+ years left on this mortgage so dont want to swap short term pain for potential long term pain by giving up the tracker.
In fact I have held off on overpaying for past couple of months until I could confirm what the situation was with AIB.
FYI for anyone wondering it seems:
- you can overpay manually with AIB in similar way to Ulster Bank - send money to an AIB account instead with your Acc ID as reference
- The have no accounts added online yet so you cant access your info like you could with Ulster Bank - but they are working on it
- If you bank with them daily and pay mortgage from AIB Current Acc there are no maintenance or transaction fees (this was news to me)
Thanks
ekuleo
Hi Brendan,
Apologies meant to reply and thank you for the info again.
So yes since your response my loan has been purchased by AIB and I have also received a letter from them confirming the increase to 5.15%
I made the difference so far to be €376 since the increases started. Alot of money but I have been overpaying €250 as discussed so could stop doing this to offset some of that for a year or 2 until we see what might change. I always keep coming back to the fact I have 24+ years left on this mortgage so dont want to swap short term pain for potential long term pain by giving up the tracker.
In fact I have held off on overpaying for past couple of months until I could confirm what the situation was with AIB.
FYI for anyone wondering it seems:
- you can overpay manually with AIB in similar way to Ulster Bank - send money to an AIB account instead with your Acc ID as reference
- The have no accounts added online yet so you cant access your info like you could with Ulster Bank - but they are working on it
- If you bank with them daily and pay mortgage from AIB Current Acc there are no maintenance or transaction fees (this was news to me)
Thanks
ekuleo
I got a letter from AIB last week confirming this.
My Ulster mortgage transferred last month and I had previously transferred my current account.