Key Post Should an existing Ulster Bank customer do anything before their mortgage is sold to permanent tsb?

RedOnion

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Some figures from an average type mortgage fixed in recent years
Theres nothing 'average' about your scenario. You've picked an example that matches your comment. You're using a rate that was only available for that LTV post November 2020.

People should definitely do the math to see if breaking makes sense, but it definitely is *NOT* clear cut for people breaking the fixed.
That's exactly what @Brendan Burgess and I said above. So stop trying to make it look clear cut that it's not worth while.

I would think that everyone on this thread will looking at options at moving away given the sale
That's a bit of a flawed assumption. Why would you switch lender if you can lock in a good rate with UB? And what about the thousands of customers who can't switch lender? Should they do nothing?
 

Brendan Burgess

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Just to bring a bit of clarity into this.

1) Everyone should check what their break fee is today with Ulster Bank.
2) It may well be worth breaking out early and refixing again with Ulster Bank. If you do this, you may have a break fee but you will not have legal costs. You have to do the arithmetic to see if it's worthwhile.
3) It may be worth breaking out and switching to another lender like Avant. Again, do the arithmetic. But given the legal costs of switching it may not be worthwhile.

However...
If you fix for say five years with Ulster Bank and end up with ptsb after that, you will probably have to switch from ptsb at that stage, so you will face the legal costs then anyway.

So it might be worth just paying the legal costs now and switching to a cheaper lender.
 

brazen_dude

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My 3yr fixed term ends with ulster bank in sept 2021. Called UB customer care regarding a fresh fixed term, they think the switch will take atleast 2years and was advised not to rush for breaking and fixing for a new term before sept... Anyone else in the same boat and tried to re-fix their mortgage with UB?
Got a letter from UB about the available rates to opt after my 3 yr fixed ends in sept... 2 yr fixed @ 2.2%; Green 4 yr @ 2.25; 4 or 5 years @ 2.35%; Loyalty variable @ 3.1%; variable rate @ 3.5% etc
 

Brendan Burgess

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Hey dude

1) What is the balance on the mortgage and the remaining term?
2) What is the LTV?
3) Do you qualify for the Avant mortgage at 1.95%?

If not, then just pick the 4 or 5 year fixed rate.

Brendan
 

brazen_dude

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Hey dude

1) What is the balance on the mortgage and the remaining term?
2) What is the LTV?
3) Do you qualify for the Avant mortgage at 1.95%?

If not, then just pick the 4 or 5 year fixed rate.

Brendan
Hi Brendan,
1) 175K with 19yrs remained
2) 45%
3) yes, but thinking is it even worth to switch bearing 1K switching fee?
 

RedOnion

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3) yes, but thinking is it even worth to switch bearing 1K switching fee?
Your fixed rate is up in September. If you started the switch process now, your fixed rate will be up before you switch, so there won't be a break fee. It's not an overnight process.
 

Brendan Burgess

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Say you fix for 5 years @2.35%
But instead, you switch to Avant.
You will save roughly, €175k@ 0.4% or €700 a year.

Sure, the legal costs will eat up two years of savings.

But, at the end of the 5 years you will still be stuck with ptsb and will have to pay the legal costs then anyway.

I think it's worth biting the bullet now and switching to Avant.

If there is a reasonable chance that you will be trading up in the next two or three years, then don't bother.

Brendan
 

brazen_dude

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Your fixed rate is up in September. If you started the switch process now, your fixed rate will be up before you switch, so there won't be a break fee. It's not an overnight process.
sorry, switching fee i meant are the costs associated with new provider... solicitor fee, valuation etc
 

Elderflower

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Current UB mortgage: 9years 4mts
Date you fixed: Nov 2019 - Start of mortgage
Period for which you fixed: 4 years
Fixed rate: 2.6%
Fixed until Sept 2023
Mortgage remaining: 100k
Current LTV: 46%
Mortgage: 1002e pm
Currently paying: 1002e pm but have made full 10% lump over payments in 2020 & 2021 reducing the term from 14 yrs originally.

Hi Brendan/ Everyone! :)

Looking for some advice on our UB mortgage. Purchased an apartment in Nov 2019 taking out a mortgage of 141k with UB. This is definitely not our forever home and probably be looking to move in 3-4 yrs (2024/2025)

We have been overpaying 10% each year and saving all our money in hopes to pay off this mortgage in full at the end of the fixed term in Sept 2023. I've laid this out on an excel sheet and while it is possible for us to come up with this money it would be two years of scrimping and saving and not much fun. We plan to travel a little bit so its very unlikely we will be in a position to fully pay off by sept 2023.

When the 4 yr fixed rate comes to an end in sept 2023, I'm aware and concerned about the possible implication of an increase of rates with PTSB and also the legal costs of switching not making sense and if we should switch now ( 2021). I'm aware there are no legal fees to switch to the same provider but not sure if its worthwhile even doing this in terms of savings. 2.2% is the next best UB fixed rate for 2 yrs. Checked with UB in April 2021 for breakage cost and they quoted approx. 1200e.

Also concerned if overpaying is the right way to go if this is not our forever home. Should we be investing the money instead? Plan to move in 3-4yrs. Not sure if we will be selling up or be able to afford to buy another property by then. In April UB also quoted a fee of 55e for an overpayment over the 10% which i didn't know was possible. Should we be overpaying more as we have currently approx. 40k in savings. Should we put a portion more of this into the mortgage. (aware we should keep at least 15K of this as emergency)


Thanks in advance for the help!
 

Brendan Burgess

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You have €100k with two years to go and you can save .4% a year by fixing for two years at 2.2%

So that is a saving of €800. So if the break fee is less than that, then it's worth breaking and refixing.

40k in savings. Should we put a portion more of this into the mortgage. (aware we should keep at least 15K of this as emergency)

The €40k in savings is earning you nothing. You would save 2.6% a year by paying it off your mortgage. So you are paying €1,000 a year to keep this in savings. So, yes, pay it off your mortgage. The break fee on the €40k will be probably about €400, so it's well worth paying.

After you break out of the fixed rate and pay off the lump sum, then reduce the term further so that your repayments will remain high. You will be clearing down the capital quickly.

it would be two years of scrimping and saving and not much fun. We plan to travel a little bit so its very unlikely we will be in a position to fully pay off by sept 2023.
Not sure why you want so desperately to be mortgage free by Sept 2023. You need to get the balance right between living your life and planning for the future. If you are using words like "scrimping and saving" then it seems that you have the balance wrong. Live a little.

Alternatively, if your forever home is within your grasp but it requires scrimping and saving for a year or two, then that is worth it as long as you won't have to scrimp and save for years after you buy your forever home.

Brendan
 

dgray_ie

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Not sure it's worth the hassle.

View attachment 5713
Maybe if you qualify for the Green rate.

Or if you have any plans to take out a top-up to extend, then it would be worth switching to AIB.

Brendan
Hi Brendan, based on your advice I just started the switching process with AIB to do a split 80% 5 years Fixed Green @ 2.1% and 20% Variable 2.75% for €159K Mortgage over 11 years. However, I see ICS have dropped their rates for 5 year fixed LTV<60% to 1.95% , I don't see any offer from ICS of paying for cashback, there is free banking with AIB just wondering , would I still be better off with AIB with their €2k cashback or is ICS going to be cheaper with ability to overpay up to 20%?
 

Brendan Burgess

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AIB
€159 @ 20% @ 2.75% = €870
€159 @80% @ 2.1% = €2,670
Interest in the first year: €3,540

ICS €159k @1.95% = €3,100

Annual saving €400

So it would take over 5 years with ICS to make up for the €2,000 cash back.

AIB is the better option for you.

Brendan
 

Brendan Burgess

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I think that you should you just fix the lot at 2.1% with AIB.

When you make overpayments, you will face a small break fee each time. But I would guess that the break fee would be a lot less than the extra interest you pay between 2.1% and 2.75%.

If you intend to make regular overpayments, then change the term to 10 years to increase the repayments so that there will be no penalty.

Brendan
 

RedOnion

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@dgray_ie
I'm with @Brendan Burgess on this one. Fix the lot.

Have a look at the following thread, AIB can only charge you a break fee if their fixed rates for shorted terms fall below 2.1%. This is based on contractual terms unique to AIB.

 

dgray_ie

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I think that you should you just fix the lot at 2.1% with AIB.

When you make overpayments, you will face a small break fee each time. But I would guess that the break fee would be a lot less than the extra interest you pay between 2.1% and 2.75%.

If you intend to make regular overpayments, then change the term to 10 years to increase the repayments so that there will be no penalty.

Brendan
Brendan & Red Onion, OK thank you again for you advice I will stick with AIB 5 years @ 2.1% much appreciated.
 

Houseseeker16

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UB mortgage: 20 years 6 months
Amount mortgaged: 408k, remaining 385k
Date you fixed: 1st March 2020
Period for which you fixed: 5 years
Fixed rate: 2.2%
Fixed until 31.03.2025
Monthly payment: 1950

LTV is about 68% but possibly higher given recent house sales in our area

Do I start looking into a refix with UB for a longer period or should I look at Avant

I think my mortgage rate was loyalty based and having my salary paid into my UB current account. What will happen when the mortgage moves? I was intending to just start using an AIB current account I have?

Thanks
 

Brendan Burgess

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Hi Houseseeker
The first thing to do is to ask Ulster Bank to quote you for a break fee.

Unless you get to less than 60% LTV and the 1.95% rate, there is no point in switching to Avant.

The less than 70% rate is 2.1%. So it would be about €400 a year.

I would tend to stay and switch when your fixed rate is up if permanent tsb has not started treating existing customers fairly by then.

Brendan
 
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