Will UB pass on rate cuts to vaiable rate mortgages? Thinking of switching from fixed

[LadyJane]

Hi, We are just over a year into our mortgage with Ulster Bank. We are on a 5.25% fixed rate which will end in 2 years. We are looking to switch to a variable rate in order to take a maternity payment break for 6 months. I know that there are penalties etc that are involved in breaking out of our fixed, but it may still be the best option for us.

I wonder if UB will be passing on anticipated further ECB rate cuts to their variable rate mortgage customers? I know that historically the banks were free to set their own variable rate as it suited them, but a colleague of mine seems to think that Irish and UK banks are under pressure to pass on rate cuts due to the 'bail out' from tax payers in both countries.

Any insights?

 

[irishlinks]

Re: Will UB pass on rate cuts to vaiable rate mortgages? Thinking of switching from f

The Ulster Variable rates on their website are the same as they were on Oct 1st - (lowest is 6.1%) . Looks like they didn't bring them down after the first ecb cut in Oct. They say they are cutting variable rates on Dec 1st by 0.5%.
Ulster have one of the highest variable rates for new customers at the moment. If you are sure about abandoning the fixed rate it might be better to look at moving lenders (Halifax 4.9%, BOI 5%). Nornally there would be a penalty for breaking a fixed rate - but if the variable rate at Ulster is higher than the fixed rate there should be no penalty! Youu could ask to go onto the (higher) variable first if it costs nothing - then look around for better rates elsewhere.

 

[LadyJane]

Re: Will UB pass on rate cuts to vaiable rate mortgages? Thinking of switching from f

Thanks for the reply. I am skeptical about getting a better rate from another lender as we are only 1 year into a 100% mortgage. UB is sending the breakdown of penalties/fees in switching to a variable to us next week. We are hoping that the extra TRS will help as well as it will go up from 20% to 24% in January. As they say, every little helps...