Ah ok.
So Bronte would have been notified that the Cost of Funds is x% and would have had to accept their word for it. But in fact their Cost of Funds was lower than x% under the formula used in her mortgage agreement.
Brendan
The cost of funds seems to change every two weeks, on odd days. I have for some years that. (2010 - 2014) Plus now in the link I've the cost of funds going back to 2012. Their link does not go back to 2005. Not sure why. As RedOnion said, it would be impossible for me to understand it.
Contract - 2005
It's a 2 page document. To provide facilities. Interest rate 3.75% per annum variable. Prime 4, term 240, monthly amount. Review 1 year later (which didn't happen). That's what we signed. There is then a one page "Default Schedule". zero about cost of funds.
Later when I was asking them to pay for independent advice they sent me a copy of my files. And there was a new document to that. 'Summary of Terms and Condition" (ROI). That I'd never seen before. 4 Says interest is quarterly. But there is nothing about Cost of Funds. I only was aware of that later.
The interest clause is just that if variable it changes when the rate changes and that will be up in the branch.
My memory is that the Commercial manager said to me "Bronte this is way easier as I don't have to go via Dublin". And he was the one with the authority to sign it. Ulster have blacked out his signature on their copy - but I have it on my copy and I can see it was him as they left a tiny bit of his signature. They also deleted his name from that copy.
How I have always descripted this on here and elsewhere is that the Bank were trying to shovel money out as fast as possible, hence this 'ingenious' solution.
Fixed
In contract, take 2019 when I fixed, it's all way more formal, with a document called Loan Agreement. This is when cost of funds is mentioned. (the person who signed this, I have an original, that person's name is not typed on it). Loads of supporting docs as well.
One single two page document has a definition of Cost of Funds at point 1. Based on how Ulster Bank source money, which can vary from week to week. Described as a variable component of the interest rate.
2014 Fix was also way more formal than the original loan. It was called Restructuring. It was a fixed rate so I didn't care what they called it. But it was X rate plus my 1.6% so it was perfect for me. Their rate was actually fixed on the time/day of the phone call is what I understood. I had to deal with people in Dublin too, it was chalk and cheese to 2005.