Can (or should) I fix if I'm on a UB tracker mortgage?

Info from UB Manage My Mortage page:

Outstanding mortgage balance €51,604.52
HPI valuation €278,506 (as listed on UB Manage my Mortgage page)
LTV 19%
Remaining term 8yrs 4mths
Monthly payments €543.16
Interest rate/type 1.45% tracker

I have €17k that I can pay off in a lump sum, and I can afford to overpay to bring my monthly payments up to €800
(I understand my payments could go over this if the interest rate shoots up).

I'm a bit lost in terms of my options. I've been reading lots of posts here, and looking at switch comparisons and mortgage calculators, but have come away quite confused.
Should I be eligible to fix with UB at their current fix rates, and might that be wise to do?
If not, should I be looking at switching, or might it be ok to stick with the tracker when it moves to AIB?

I would greatly appreciate any advice you can offer.

Thank you
P

Your mortgage balance is quite low, so mortgage rate changes won't be overly onerous on you.

Unless interest rates go to 11%-12% your current monthly payment won't go over €800

They won't go to 11-12%

If your mortgage rate was 3%, your repayment would still be under €600

If it went to 4%, it would be about €620.

As your balance is so low it is unlikely another bank would offer you a mortgage and the legal costs would outweigh any savings by a large margin

Parking1 said:

Should I be eligible to fix with UB at their current fix rates, and might that be wise to do?

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You are certainly eligible to fix with UB if you want to. Here are the rates:

You can use this calculator to see what the monthly repayment would be by changing the interest rate.

Thanks so much for your responses. I really appreciate it.

Do you know, if you move to fixed rate, can you adjust the term of the mortgage (to shorter) at that time?

is your tracker 0.95% above ECB and therefore the current interest rate as of 1st Aug is 1.45%
or is the tracker 1.45% above ECB and therefore the current interest rate is 1.95%


If the former, you are most likely best to stay as you are and this gives you maximum flexibility in paying extra.

Ona fixed rate you can only overpay by 10%. But you could pay a lump sum now and bring the term down.


Had forgot about fixing with UB in my first reply. That is very easy. But at the end of the day your balance is small, so interest rate changes won't make any substantial change in your repayments. A 3.45% rate would bring you to 592/month The 5 year fix at 2.35% works out at €568 .

Parking1 said:

Do you know, if you move to fixed rate, can you adjust the term of the mortgage (to shorter) at that time?

Click to expand...

I'm not sure – best to ask UB.

Parking1 said:

Do you know, if you move to fixed rate, can you adjust the term of the mortgage (to shorter) at that time?

Click to expand...

I recently did exactly that with UB: when sending the rate sheet back, wrote a letter were I asked to reduce the mortgage contract time by about 3 years. Increased overall repayment of course.
Was implemented as requested, no questions asked. I was expecting they will request some more info (updated payslips or similar) but they didn’t.

Thanks everyone for your replies

newirishman said:

I recently did exactly that with UB: when sending the rate sheet back, wrote a letter were I asked to reduce the mortgage contract time by about 3 years. Increased overall repayment of course.
Was implemented as requested, no questions asked. I was expecting they will request some more info (updated payslips or similar) but they didn’t.

Click to expand...

That's interesting.
So did you agree to the fixed rate not knowing if the term change would be approved, or would you have had time to cancel if it had been?

@Parking1 This doesn't answer your last question but you should also look at the tracker thread – and consider posting your mortgage details there (in the requested format). When doing do, so should be clear that you specify your tracker margin above the ECB base rate, i.e., ECB + X%

@Paul F Thank you. That thread has been very useful just reading the initial posts.

The UB manage my mortgage page shows this:


Would this mean that the 1.45% is inclusive of the ECB rate? There is no mention of the ECB rate in the online account.

Parking1 said:

Would this mean that the 1.45% is inclusive of the ECB rate? There is no mention of the ECB rate in the online account.

Click to expand...

Did Ulster Bank increase your interest rate from 0.95% to 1.45% in recent weeks? If so, your rate is ECB + 0.95%.

@Paul F thanks again. Yes, I'm at +0.95%

After everyone's help here, and the initial posts on the other thread you linked to, I think I understand far better. So thank you all again. I've gone from no-clue to somewhat-informed over the last few days

Whether fixing or not: Lump sum payment of €17k now, to reduce my balance. Perhaps reduce mortgage term.

I forgot to mention that I will have a pension lump sum payout due in three years which gives me the option to clear my remaining mortgage (as long as I do the lump sum overpayment I can afford now).

With that in mind, the longest fix that might make sense is 2yrs (currently at 2.2%)

From what I've read in the other thread, my tracker mortgage rate will come to 2.2% later this month anyway. It will probably go up further, but over 2 years the savings of a fix wouldn't be huge due to my low remaining balance. After coming off the fix I would likely be faced with a much higher interest rate than I would have if I'd stayed on the tracker, potentially negating any savings from the fix period. If I chose to pay off my mortgage in full when my pension came in, then I would be on this higher rate for a year, but if for some reason I didn't want to or could not pay it off at that point, I would be on it for the remaining duration of the mortgage.

Staying put seems the sensible option.


Moderator's note: @Parking1 has posted their mortgage details in the tracker thread. Please add any further replies there.