Switching to Ulster Bank

[WorstPigeon]

Until recently, I thought that Ulster Bank only allowed overpayment of 10% of the payment on their fixed rate loans, like most of the others. I’ve now discovered they allow overpayment of 10% of the principal, which makes them a lot more interesting.

So I’m thinking of switching to them for their 4 year 2.6% deal. I’ve never switched before, and have a few questions about it.

I’m currently not saving at all. I have savings, but every month I make a fairly large overpayment to my mortgage rather than increasing my savings. Would this be acceptable as evidence of saving?

I currently overpay every month via AIB online banking. The amounts vary; it’s basically whatever I have left over. Is this possible with Ulster Bank? From their site, it looks like you have to ring them to overpay, so maybe they prefer you only do it occasionally?

Would I need a current account with them to make payments from, or could they just take it from my AIB account? I’ve no interest in switching to them for general banking (and the 2.6% deal doesn’t require it, unlike some of their other deals).

Lastly, does it seem like a good time to fix? Rate reductions seem to have slowed, and honestly 2.6% seems pretty good vs my current 3.15%.

Edit: Oops, I thought I put this in the switching forum. Sorry about that.

 

[qwerty5]

I switched to Ulster bank in 2016. I was in a similar position to yourself. I was overpaying my mortgage randomly and had little savings. They never asked about it.
They sent out a guy to or house to help with forms which meant I could explain or highlight anything I needed very easily.

You can overpay electronically and ad hoc. Once your mortgage is set up you just contact them and they'll tell you an account number to pay into and give you a reference number. You can use this for all future overpayments.

I fixed at the 2.6%. I think that's as low as we're going and there's some risk of rises. If rates go lower it's not expensive anymore to unfix.

 

[Miley07]

Wait, what, you can overpay 10% of the principal per year? As in for every 100k you can overpay 10k per annum? I have been on 3.1% VAR overpaying and wont switch to the 2.6% as we overpay each month well beyond 10% of the payment. If you can overpay by 10% of the principal sure its a no brainer?

Anyone actually overpaying significant amounts on the 1.6 fixed able to confirm this?

 

[RedOnion]

Wait, what, you can overpay 10% of the principal per year?

Yes, correct. This is in UB terms, and is different to other lenders.

 

[skrooge]

As an avid overpayer I too am thinking of switching to Ulster for this. I've a pedantic question: In terms of the 10% overpayment per year is the 10% fixed on the initial amount or does it reduce each year in line with amortisation and overpayment eah year? I.e., on 100k mortgage fixed for four years can I overpay by 10k each year or is it 10k in year one, 8.7k year 2, 7.7k year three and 6.7k in year four?

 

[RedOnion]

It's 10% of the balance at the start of each year, so technically yes, it reduces each year.

 

[ANCHOR MAN]

What's the chances that AIB match Ulster for their 5 year fixed rate if i threatened to move? Their 4 and 5 year rates look excellent at the moment.

 

[skrooge]

To get anywhere with a bank I would expect you would have to be waving an Ulster Bank contract in their face (along with every other AIB customer). At that stage why not switch anyway. Ulster will give you greater flexibility in terms of overpayment.
If it was to happen it would more than likely come through their EBS subsidiary.

 

[misemoi]

Just switched to Aib variable but am now considering switching to the four year fixed with Ulster. We generally overpay but it would be within the 10% limit. How are Ulster to deal with ? How likely are they to exit or sell loans to a third party ? Is the 10% guaranteed or is this a temporary term? Do they expect a waiting period with current provider ?

 

[RedOnion]

Is the 10% guaranteed or is this a temporary term?

It's part of your contract terms, so valid for the fixed period.

How likely are they to exit or sell loans to a third party

There is always a rumour about the exit piece. Unless exiting the market here, it's very unlikely they would sell performing mortgages. In any event your contract terms would remain.

Do they expect a waiting period with current provider ?

My understanding is UB want 6 months with current lender.

 

[misemoi]

Brilliant, thanks. I ran the numbers on the overpayment and it might be restricting us a bit too much as we'd be close to the max so any extra we have we couldn't put into the mortgage.