Ulster Bank Switching Rate Query

T

treesandtelly

Registered User
Messages
9
Good evening all,

I have a query that may appear silly, so please bear with me! Currently on 2.45% mortgage rate with UB. Enquired about switching to 2.25%. This would cost €115, and I'd save €17 a month for just over two years. This €17 a month would equate to €408 over the term, minus the €115 fee = €293 saving over two years. This may not seem worthwhile to a lot of you, which I understand, but I'm of the opinion that every little helps! My question is- would this 2.25% rate be honoured over the two years with UB leaving the mortgage?

On a separate note, if I were to switch mortgage to another lender, I am guessing that the fee would be much higher than the breakage fee to switch rate with UB above (€115?). Of course I would have to price this with UB but Id love to know if this is generally substantially higher or not. Any guidance appreciated.
 
Hi,

My question is- would this 2.25% rate be honoured over the two years with UB leaving the mortgage?
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The 2.25% rate will be honoured by Ulster Bank or whoever takes over their loan book (if that happens within two years). What is impossible to know is what rates Ulster Bank or whoever takes over their loan book will be offering in two years' time.

On a separate note, if I were to switch mortgage to another lender, I am guessing that the fee would be much higher than the breakage fee to switch rate with UB above (€115?). Of course I would have to price this with UB but Id love to know if this is generally substantially higher or not.
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No, the break fee will be the same regardless of whether you are switching to a different rate with UB or switching to a different lender. But if you are switching to a different lender you will have to pay a solicitor (usually €1,000 to €1,500) and a valuation fee (about €150). On the plus side, the new lender may have a cashback offer.

Care to share your basic mortgage details? Balance remaining, value of property, date when you fixed, how many years you fixed for.
 
Thank you Paul! €119000 outstanding, LTV 68%. I am fixed for two years at 2.45%, I fixed this around three months ago. 14 years 9 months left on mortgage. In terms of switching, is it very difficult? KBC are going to call me to discuss this. My only issue here is that my partner has left his permanent job recently and taken up temporary employment. I am guessing that KBC probably wouldn't let us switch on account of this?
 
RedOnion said:
It really depends on the circumstances. e.g. if he's a qualified acountant earning 80k+, it won't matter that he's on a temporary contract.
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Thank you! Unfortunately, that's not the case. He's earning around 42k. The contract is running until next December. I'm presuming that would be very offputting for KBC?
 
It all depends on the circumstances. I'm not close to KBC's underwriting criteria, but I know some banks are open once the contract is for at least 12 months, and you've a history of employment. It's helps that you've a relatively low mortgage balance.
A call from one of their mortgage advisers will give you a good steer.
 
RedOnion said:
It all depends on the circumstances. I'm not close to KBC's underwriting criteria, but I know some banks are open once the contract is for at least 12 months, and you've a history of employment. It's helps that you've a relatively low mortgage balance.
A call from one of their mortgage advisers will give you a good steer.
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Thank you. Hoping they'll give me a call soon!
 
Hi, just an update. I rang KBC. The person I spoke to had quite poor diction and was difficult to make out, but KBC offered me a 17 year mortgage despite my current UB mortgage being 14 years 9 months? Didn't make much sense to me so I won't be going forward with KBC.
 
treesandtelly said:
Hi, just an update. I rang KBC. The person I spoke to had quite poor diction and was difficult to make out, but KBC offered me a 17 year mortgage despite my current UB mortgage being 14 years 9 months? Didn't make much sense to me so I won't be going forward with KBC.
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Don't be put off by that call! If KBC will accept you, it is well worth your while switching. That is because they give €3,000 cashback to switchers and have a 2.3% rate (for both the 2-year and 3-year fixed rate).

If you could get that rate, you would save about €2,000 over the next two years (even after solicitors' fees of €1,000).

Alternatively, you could look at AIB's 5-year fixed Green mortgage (2.1% with €2,000 cashback). That would save you about €1,500 over the next two years, as long as your property has a BER of B3 or better. (If you think it does, a BER cert will cost you about €150.)
 
Paul F said:
As for the 17 year term, I don't understand why they said that.
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I was thinking about this, and it's quite possible that when they worked it out, this was the minimum term where the repayments met their affordability criteria.
 
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RedOnion said:
I was thinking about this, and it's quiet possible that when they worked it out, this was the minimum term where the repayments met their affordability criteria.
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Do you mean that you think KBC were willing to lend to treesandtelly even if their partner only has temporary work (provided the term is extended to 17 years)?
 
treesandtelly said:
but KBC offered me a 17 year mortgage despite my current UB mortgage being 14 years 9 months? Didn't make much sense to me so I won't be going forward with KBC.
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Nothing stopping you over-paying and paying it off early you know!
 
but KBC offered me a 17 year mortgage despite my current UB mortgage being 14 years 9 months? Didn't make much sense to me so I won't be going forward with KBC.
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KBC allow you to make very large overpayments without penalty (10% of the outstanding mortgage balance over the fixed term, which is €11,900 over 2 or 3 years in your case). That is more than enough to allow you to "top up" your monthly payments and in that way reduce the term from 17 years to 14 years 9 months (or shorter if you have spare cash).

So if that puts your mind at ease about the 17-year term, you could consider a switch. This thread gives advice on finding a cheap solicitor.
 
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