Ulster bank offset Mortgage- facility balance question

wannapress1

New Member
Messages
3
This mortgage was originally the first active current account mortage . Does anybody know what happens when your facility account balance equals or is greater than the mortgage outstanding balance? would the mortgage be interest free and otherwise continue as before ? originally I had thought that the facility account would be used to clear the actual account but i also recall reading somewhere that this was changed by Ulster bank at a later stage . Thanks in advance.
 

Monbretia

Frequent Poster
Messages
1,647
The balance in your facility (current) account is offset for interest purposes against your mortgage but once it equals or is more than the outstanding mortgage it does not trigger a redemption of the mortgage. You are right in that initially that was actually an unintended effect in the system rather than an intention and it was changed by FA with the change of the Offset Mortgage as it was originally called to the Current Account Mortgage along with a few more modification.

Once you have as much or more in your facility account as the mortgage no interest is charged and you just continue on as usual unless you actually want them to pay off the mortgage but you'd need to contact them and request that, it will not be automatic because obviously someone might just be holding money temporarily in the facility and might intend taking it out again for some purpose.
 

cremeegg

Frequent Poster
Messages
3,081
I have one of these accounts, and have made numerous complaints to UB over the years about their handling of the account, at one point they threatened to take me off the tracker rate because I had rented out the property, this despite the mortgage contract being headed "residential investment loan". I have received in excess of €2,000 in compensation for their errors, so I think it's fair to say UB have no idea how to deal with them. The UB staff certainly hate them.

My understanding is that if the balance in the facility account exceeds the outstanding mortgage, UB will close off the mortgage without reference to you. Although I am not in this position so I have not tested this.

As an aside, it's virtually free money, I certainly don't intend to give them the chance to close the account. Also I am fairly certain that UB look on AAM for info on these accounts. I am fairly sure have lost all the original FA documentation.
 

wannapress1

New Member
Messages
3
Thanks for the replys. I would have thought that Monbretia's view was what would happen . I would be very surprised if UB could take the money once the figures matched. Montbretia you dont happen to have any referance backup on this by any chance or do you know if it was sent out in leaflets regarding the mortgage at any stage ? Thanks again.
 

Monbretia

Frequent Poster
Messages
1,647
It definitely does not trigger a redemption, I have had in excess of my mortgage balance in it for more than 10 yrs without issue. I'll have a look through paperwork later when I am home.

Offset or current account mortgages were only available from FA for home loans, you could not take out one on a buy to let, well not truthfully anyway :)
 

Monbretia

Frequent Poster
Messages
1,647
I have read through the stuff I have and nowhere does it say it triggers a redemption, to be honest I know this without having to read them :) It mentions continuing on with the facility account even when the mortgage is actually paid off, initially you would have had to close the facility too when the mortgage was gone.

I have not paid interest on my mortgage for over 10 yrs, yes for some of those years I might have been able to get a better rate investing the money and I did that with some of it but I have left enough to cover the full amount (which is small at this stage) between the facility account and the other offset accounts.

You definitely were never meant to have an offset mtg on a rented property, it refers quite explicitly to that and says you can be removed from the product if the house is let. It is meant for your principal private residence only. Nowhere on my loan offer does it refer to it as a 'residential investment loan' but having said that it is true that UB in general haven't a clue about this product bar a few staff in Head Office who used to know, in fact one used to post here I'm pretty sure!

UB would happily get rid of all Offset mtgs if they could I am sure and unfortunately a lot of customers don't remember some of the great features and benefits of this product either and don't use it correctly.

You did well cremeegg getting money out of them if you now have the property rented as it's crystal clear in the documentation that it is for PPR only, although maybe it was for other shortcomings in their dealings with the account :)
 
Last edited:

cremeegg

Frequent Poster
Messages
3,081
Monbrieta,

You have contradicted me twice now on this thread.

On the question "does a balance on the facility account greater than the mortgage outstanding trigger a redemption"

I have said that I was told by UB staff that it does, I fully accept that what UB staff say is not the final word on these matters. Indeed I said in post 3 above that "UB (staff) have no idea how to deal with them"

Since then you pointed out that you have had an excess on your facility account for more than 10 years. And of course I fully accept this. It is possible that UB's attitude might now be different, toward a customer whose account went into overall credit for the first time now. I do not, and did not, claim to know how this is covered in the mortgage contract.

People can have different information, or different understandings of the same information, however the nature of your contradicting me on the second issue is different. It is not in the spirit of AAM to accuse another poster of not being truthful.

Offset or current account mortgages were only available from FA for home loans, you could not take out one on a buy to let, well not truthfully anyway :)
It was for just this assertion (that I had in some way been "untruthful" in renting out the property secured under the loan) that UB paid me substantial compensation.

The General Ts&Cs on my First Active Current Account Mortgage Loan dated 4 Feb 2003 refer to Residential Investment Properties at paragraph 24, page 8.

The same document dated "As of November 2005" contains the same clause under the same reference.

So in fact Current Account investment mortgages were available from FA for at least 2 years from April 2003 to Nov 3005.
 

Monbretia

Frequent Poster
Messages
1,647
Well I'm sorry if I have upset you by doubting you but my recollection is that this product was never available for buy to lets and was solely for PPRs. Having said that I'm sure many people took them out intending that and many branches were able to approve their own mortgages so who knows! It was simply a mildly humorous comment as we all know not everyone tells banks the full story! Sorry if you took it more seriously.

In the initial launch of the Current Account Mortgage it was indeed a part of it that an excess balance in the facility account would trigger a redemption, this was removed when it became clear it was not what was always wanted by customers. There were several other changes as well to the product regarding the repayments and what happened when you overpaid.

I only have a Terms & Conditions booklet from Oct 2006 when they were changed because of the change from Current Account to Offset even though I have had the mortgage since originally launched as the Current Account Mortgage. I can't remember when the original product was launched, I transferred from an existing ordinary mortgage to it.

As you say UB have no idea really about these or their workings.
 
Last edited:

cremeegg

Frequent Poster
Messages
3,081
Well I'm sorry if I have upset you by doubting you but my recollection is that this product was never available for buy to lets and was solely for PPRs. Having said that I'm sure many people took them out intending that and many branches were able to approve their own mortgages so who knows! It was simply a mildly humorous comment as we all know not everyone tells banks the full story! Sorry if you took it more seriously.
"I'm sorry if I have upset you" does not cut it.

Why should you be sorry if I'm upset.

You should be sorry that you have basically accused me of fraud in the wrong, based on no more than your recollection of a mortgage product from the early 2000s.

Offset or current account mortgages were only available from FA for home loans, you could not take out one on a buy to let, well not truthfully anyway :)
Thats what you should be sorry for.

I have referred you directly to the details of the Ts&Cs and you still don't accept what I say.
 
Top