Ulster current account and mortgage

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Wiresandmore

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I’ve had the UB “UFirst Private” service for a number of years which I initially had to take to get a lower mortgage rate for a large loan in 2011 and kept ever since. For the most part it’s been great.

Do AIB or BoI have anything equivalent?

Just realising this is going to be quite an effort given all of us in the house (myself, my wife and 5 kids) so I best get started on this sooner rather than later.
 
Wiresandmore said:
“UFirst Private” service for a number of years which I initially had to take to get a lower mortgage rate for a large loan in 2011
Click to expand...

I think it only works with variable rate mortgages and these have much higher interest rates than the fixed rate mortgages.

KBC has a similar arrangement applying a 0.2% discount to all mortgages, but they are leaving the country as well.
 
Thanks - we are on a 2.5% fix for 5 years with just under 3 years left to run. 450K/20 years left. I am in a position to start overpaying 10% and can do so (hopefully) for this year and through for 3 more calendar years. So was going to leave mortgage as is for now and reconsider when we have made those overpayments and come off the fixed rate.
 
If you qualify for an Avant or ICS mortgage, the rate could be 1.95% saving you €2,500 a year or €7,500 over the next three years.

Ulster Bank caps its break fee at 6 months interest, so €5,600 and that is the cap. It could be less.

As you are going to have to move anyway when the fixed rate is up, you might as well bite the bullet now.

Get a quote for the fixed rate break fee.

Brendan
 
@Wiresandmore Your break fee will be around €3,400. If you make a 10% overpayment this year, the break fee will fall by about 10% (~€340).

If interbank interest rates don't move much, the €3,400 break fee will fall by about €100 for each month that passes (but there is no guarantee that current mortgage offers will be available in the future).
 
@Wiresandmore To do the calculation yourself use this formula (which only works for your mortgage): B*(-0.158-(R))/100*Y

where
  • B is your outstanding balance at that time
  • Y is the number of years left on the fixed-rate period (it doesn't have to be a whole number)
  • R is the interbank rate (estimate it using this; choose today's date, "EUR Rates 1100" and the number of years nearest to Y)
The above formula only gives an estimate. The break fee for Ulster Bank mortgages can never be higher than six months' interest.

For my estimate, I assumed that you fixed in the middle of June 2019.

I think you might have misread the letters you got from UB a few months ago. If you still have them (there should be two separate ones), please look at them again. They emphasise the maximum possible break fee (six months' interest) way too much and don't really highlight the real break fee. Is it possible that you wrongly thought that the break fee was six months' interest (~€5,800)?
 
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Can I ask given you said it only works for my mortgage - is the -0.158 specific to me? How did you get that number?
 
Wiresandmore said:
Can I ask given you said it only works for my mortgage - is the -0.158 specific to me? How did you get that number?
Click to expand...
Yes, the -0.158 makes the formula specific to you. It is the 5-year swap rate for 13th June 2019 (the date I assumed you fixed your mortgage on), taken from here, which I used as an estimate of the interbank rate.

But the best thing is to call up UB and get them to post you out a new break fee quote.
 
I think Paul's example really shows the importance of finding the date the fix actually starts - in his assumption of 13 June 2019, the five year rate was -0.158; two weeks later (1 July 2019) it was down to -0.232; two weeks after that it was up to -0.214.

I was very lucky 18 months ago and the difference in the two relevant rates was negative, which meant I didn't pay a break fee on moving to a lower rate within UB.

I would *strongly* advise calling UB *again* a few days after you request the fee, i.e., after they have generated the break fee. They can't tell you the break fee on the initial call, but they can on a subsequent one. The offer is time-limited and I never actually got the postal version of the break fee, it just never arrived. I accepted the offer over the phone and then the bumf related to that did arrive.
 
@nephster You're right – interbank rates were volatile in 2019, so we need to know the exact start date that @Wiresandmore fixed for an accurate estimate. Unfortunately the break fee could be a lot higher than my above estimate.
 
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