I have issued a press statement just now
Permanent tsb must be blocked from taking over Ulster Bank mortgages
Brendan Burgess, Fair Mortgage Rates Campaign
It has been reported that permanent tsb is the front runner to take over the performing home loans from Ulster Bank. To do this, permanent tsb would require a capital injection from the major shareholder, the state. This must not be allowed to happen.
Ulster Bank has always been a fair lender
· They were the first lender to publicly commit to allowing existing customers to move to the lower rates on offer to new customers.
· They never engaged in cash back which distorts the market
· Until the arrival of Avant, they had the lowest fixed rates on the market
·
By comparison, permanent tsb has a long history of exploitation of existing customers
After the financial crisis, permanent tsb pushed up their Standard Variable Rate to 6.25% when AIB and Bank of Ireland were charging 3% and 3.25% respectively. They only brought rates down after a long concerted campaign by permanent tsb mortgage holders.
· They are the only remaining lender which does not allow existing customers to avail of the rates on offer to new customers
· They keep all their rates high
· The only way that they can attract new customers is through 3% cash back and discounted one year rates. But new permanent tsb customers pay heavily for this over the full term of the mortgage.
The result is that Ulster Bank customers are paying much less than permanent tsb customers
| Ulster Bank | Permanent tsb |
| | |
2 years | 2.2% to 2.4% | 3.1% |
3 years | | 2.95% |
4 years | 2.35% to 2.55% | |
5 years | 2.2% to 2.55% | 3% |
7 years | 2.8% to 3.15% | 3% |
10 years | 2.8% to 3.15% | |
| | |
Home improvement | As above | 3.95% |
| | |
Permanent tsb cannot be trusted and the government should not facilitate the development of ptsb.
But aren’t Ulster Bank customers protected for the rest of the fixed rate term?
Yes, they are. Whoever acquires the loan can’t put up the rates until the fixed rate term is up. But at that stage, the customer would be vulnerable to permanent tsb’s exploitative practices.
But can’t Ulster Bank customers switch if they are treated badly by permanent tsb
Some customers can’t switch because their financial circumstances have changed since they drew down the mortgage – e.g. they have had children or they have changed jobs and are still on probation.
As switching costs €1,500 in legal and other fees, it’s often not justified for smaller mortgages.
And even when it is justified, most people are not comfortable with financial issues and are paralysed with inertia as a result.
Other information
I have set up a dedicated forum on Askaboutmoney to help customers of Ulster Bank worried by the withdrawal.