Ulster Bank changes terms for people who want to port their tracker to a new home

Brendan Burgess

Founder
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I spoke to UB this morning and they told me that they had changed the terms on this mortgage product a month ago.

The Ulster Bank [broken link removed]is a little confusing because they want to make sure that the customer can't claim that they did not know that they were losing their tracker.

While this appears inconsistent, this is what it means.

The bit in bold is very clear so that no one can complain later that they did not realise that they were losing their right to a tracker.

The first bit says that while you can't move your existing rate, you can take out a new rate for the first 5 years.

Here is their example, which I have amended to put in rates

My summary

|before|after
Home value|€120,000| €300,000
Tracker mortgage| €200,000|€200,000
SVR mortgage|0|€180,000
Total mortgage|€200,000|€380,000
Negative equity|€80,000|€80,000
LTV|166%|127%
Interest rate on tracker element|1.25%|2.75%
Additional interest on tracker element|-|€3,000
Additional interest on tracker element {br} after 5 years||c.€6,000
 
Is this a fair deal?

Obviously it's not as good as the deal they were doing, when they allowed you retain your tracker for the full period.

I was very surpised at the time of the generosity of their deal. It is in the lender's interest to wean people off trackers. Most of the other banks are hoping that with the pick up in the economy and the pick up in house prices, people will be "forced" to trade up and will give up their tracker.

It's somewhat similar to Bank of Ireland's deal. BoI increases the margin by a specified amount of 1.3% for 5 years.

It's a lot better than no deal at all, which is what the fully state owned banks - AIB/EBS and ptsb offer.

The rate increases by an average of about 1.5% for 5 years. So this will cost you in interest, around €3,000 for the average loan of €200,000.

After the 5 years, the rate increases to about 4.75% SVR , so that is an increase of about 3% for most people.

But after 5 years on a tracker, you will have paid down a fair lump of your capital, so you won't notice it as much.
 
Ub

Co-incedentially i was in UB today enquiring about my options. My PPR is approx 80k in negative equity. I am looking at my options. I was told in branch that if i rent out my PPR now, and take a loan with another bank, i will NOT lose my tracker. (was surprised, and would need to get that in writing). However, if i rented out and applied for mortgage with them i would lose the tracker (becomes an investment rate - 5.6%). Seems odd. Almost like they are encouraging to look the new mortgage else where !

I should add, the option to sell and carry the negative equity is as Brendan outlined. I am swaying more to the option of renting, paying the difference, keeping the tracker, and applying for a 2nd mortgage elsewhere.
 
Damoz, can you let me now what happened with your rent/new mortgage? Did they allow you to keep the tracker?

Shane
 

You aren't looking to port a mortgage. That is a different kettle of fish.
 
Table of examples for increase in UB tracker rates

I have used the most common scenarios, to work out what the typical increases would be

New LTV|Existing margin|New marginfor 1st 5 years
up to 90%|0.8%|2.%
90% - 140%|0.8%|2.25%
up to 90%|1%|2.25%
90% - 140%|1%|2.5%
up to 90%|1.5%|2.5%
90% - 140%|1.5%|2.75%
 
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