Discussion in 'The Fair Mortgage Rates Campaign' started by CiaranT, Jul 15, 2017.
3.5 LTI is a Central Bank criteria. Not sure how this is selective. It isn't a product targeted at your average first time buyer I'd say, also given the 80% LTV.
I'll personally run the numbers though. I am on the 3.1% (SVR -1.2%) loyalty plus rate, and it looks like I'd save around 1000 Euro in interest per year. Coincidentally, €1000 is the amount one can overpay per year according to their offer details.
Have they published the details of this offer officially ?
Its now on their website under 4 yr fixed rates heading
And the €1,500 for first time buyers, switchers and movers continues to apply.
4 years from July 2017 would be July 2021. So is it a 4 1/2 year fixed rate?
Yes, that's how UB always do fixed rates. It's fixed until a specific date rather than for a specific term. I imagine it makes their operations a lot easier as every customer on a product rolls on the same date.
Interesting that UB's SVR is the default roll-to rate -
When your fixed rate mortgage expires you can revert to SVR* or any other mortgage product that you may be offered at this time.
*As Standard Variable Rate (SVR) is not linked to the European Central Bank base rate (ECB), the rate can increase at any time even if there is no change in the ECB base rate.
Ulster Bank offers all its existing customers the right to avail of the deals on offer to new customers.
Sure but there is no guarantee that will be the case in the future.
Contractually, their SVR (not any particular "loyalty" rate or LTV rate) is the default roll-to rate.
I don't have a particular problem with that but I think it's noteworthy.
I'm with UB, paying 3.1%, so all it would take is a phonecall to move me to 2.6%.
I'm wary though; this major rate cut is likely to be the canary in the coalmine and I don't like the idea of relying on a bank's goodwill in terms of rolling back on to their extremely unattractive SVR.
Their policy is clear. Any customer can avail of the deals on offer to new customers.
Ulster Bank has a high SVR - but it is artificial in that (almost) all customers are on a discount to this.
I was thinking the same, the last time they offered a 4 year deal was One big switch. That was only April 2016 & 3.29% for LTV 60%. Fast forward one year and there are now better offers for 80% LTV fixed or variable (loyalty, loyalty plus). So will we see variable rates drop.....
Is the 1k limit on overpaying new? I spoke to them a few months back and seem to recall it was 5% of balance. Kbc are 10% I think.
Was pretty sure I was going to go for this but that would make me pause, I tend to try pay off an extra amount monthly so unless I can get 2.6% return after tax on cash which is unlikely then the gain of switching reduces somewhat(not done the maths) and might be best waiting to see what variable rates do.
Is it possible to fix a portion of the mortgage? E.g. Fix €300K and leave €20K variable on a 320K mortgage. That way you could pay any extra amount against the €20K. I don't know if it's possible with UB. I've seen it mentioned a few times on this forum for mortgages.
I see that Ulster Bank allow you to make an over payment of 1000 a year against a fixed mortgage without any penalty. I don't know what level of over payment you were considering, but may be worth noting in this case.
An early redemption charge is due if you repay all or part of your mortgage before the end of the set fixed period, however you can make an overpayment of €1,000 each year without any penalty. http://digital.ulsterbank.ie/personal/mortgages/fixed-rate-mortgages.html
Qwerty5, I'm with ULSB and have a fixed portion circa 66% of outstanding mortgage and the remainder is on a variable. I also make over an payment of €200pcm without any penalty (assume it goes off the variable portion).
I've applied for this (my mortgage is with UB at 3.1%). They're sending out a form for us to sign and that's basically it.
We'll save a material amount per month which is great.
Just by way of update, I haven't signed anything.
Basically, because of a concern that UB might be playing ducks and drakes (imagine a bank doing such a thing).
My current rate is 3.1%, but in reality it's UB's Standard Variable Rate of 4.3% minus a fixed discount of 1.2%.
So what happens if the Government/Michael McGrath stuff caps the banks' standard variable rates at a particular level? Say 2.5%; then I paying 1.3% as per the terms of my contract. It's on the road to being the loss making tracker scenario all over again.
This could be a covert effort to kill the loyalty rates...
So if the legislation capped the SVR at 2.5%, you would have a rate of 1.35% (2.5% - 1.2%)
By fixing now, you lose this rate.
I wouldn't be unduly concerned about this, happening although it's a small risk.
I don't think that anyone has proposed that something called the "SVR" should be capped.
If a blunt instrument like capping the SVR were introduced, then it would do huge damage to Ulster Bank which prices off SVR. The legislation would have to allow for that.
The most likely outcome is that the maximum rate a bank can charge its customers is set at "x + y". Let's say that this works out at 3%. If Ulster Bank is charging some customers an SVR of 4.5% without any discount, they are going to have to give those customers a discount of 1.5%. They will not have to reduce the SVR as such.
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