Ulster Bank 2.5% Fixed Rate

[Gordon Gekko]

I understand that Ulster Bank are launching a 2.5% Fixed Rate over the coming days.

€500k minimum, no income or LTV restriction (for switchers).

4 year term.

 

[Joe90]

Will they be applying the +2% stress test?

 

[Brendan Burgess]

Will they be applying the +2% stress test?

For first time buyers and second time buyers, they will have to.

But I don't think that they have to do so for switchers.

Brendan

 

[Sarenco]

I understand that Ulster Bank are launching a 2.5% Fixed Rate over the coming days.

€500k minimum, no income or LTV restriction (for switchers).

4 year term.

UB already has a 4-year fixed product @2.6% for LTVs up to 80%, €300k minimum mortgage size.

A 10bps point move for jumbo mortgages (the % of borrowers with €500k mortgages must be tiny) is pretty underwhelming.

Still, I suppose every little helps...

 

[Gordon Gekko]

UB already has a 4-year fixed product @2.6% for LTVs up to 80%, €300k minimum mortgage size.

A 10bps point move for jumbo mortgages (the % of borrowers with €500k mortgages must be tiny) is pretty underwhelming.

Still, I suppose every little helps...

Ah Sarenco, you’re a hard one to please!

Think back to when people would be dancing in the streets at the prospect of a 2.5% rate.

 

[DublinD]

UB must have identified a niche market for themselves...

Bottoming out also ~2.5%

 

[Sarenco]

Ah Sarenco, you’re a hard one to please!

Think back to when people would be dancing in the streets at the prospect of a 2.5% rate.

Yeh, I know, but UB haven't reviewed their rates since July. I was hoping the next moves from UB and KBC would be meaningful.

A 10bp reduction on a rate that is only of relevance to a tiny minority of borrowers is pretty disappointing. It still doesn't beat BOI's (effective) 3 and 5-year fixes @2.4%.

 

[RedOnion]

Here are updated UB fixed rates, available from today. Website not updated yet.

The 500k rate is in the list. It's a 5 year fixed at 2.5%

Loyalty plus 3 year fixed reduced to 2.75%. I haven't had time to compare other rates.

https://www.ulsterbankintermediaries.ie/product-rates/fixed-rate-mortgages

Edit: I missed the rate on first read as it's under 5 years. Post fixed.

 

[qwerty5]

I still remain to be convinced that there’s not a sting in the tail for someone who’s already on one of UB’s “Loyalty Rates”.

These are quasi-trackers in that they’re a fixed margin below the bank’s SVR.

But what if the authorities cap the banks’ SVRs and limit UB’s SVR to (say) 3%? The contractual obligation to SVR minus (say) 1.2% could be incredibly valuable but (surely?) wouldn’t then be available at the expiry of the four year fixed term.

I was thinking the same thing. I'm on 3% (SVR - 1.3%).

If you fix, they say you go onto SVR (4.3%) at the end of the term. I know you can then move or choose another applicable mortgage but if I fixed now for 4 years at the end of 4 years I'd owe less than €200K so I couldn't move back to the 3% and the cheapest I could then get is 3.2% (at todays rates). So to save .4% for 4 years I'd have to pay an extra .2% for the remainder of the mortgage.
I need to dust off the Excel.

 

[Gordon Gekko]

Probably worth highlighting that it’s a 5.5 year rate because of the way the dates pan out...

 

[SuperMario]

Hi Gordon,

Could you please explain what you mean by saying this is effectively a 5.5 year rate?

Thanks in advance

 

[ronaldo]

Hi Gordon,

Could you please explain what you mean by saying this is effectively a 5.5 year rate?

Thanks in advance

Some banks have terms and conditions that specify the mortgage is fixed until 5 years from drawdown of funds. These Ulster Bank products have specified end dates of 31st of March as opposed to the date of drawdown. Therefore, someone drawing down today has almost 5.5 years of a fixed rate.

 

[Gordon Gekko]

Just by way of update, we are now on 2.5% for the next 5.5 years.

I am very happy with that in the context of where rates stand in Ireland.