Natwest considering closing Ulster Bank in the ROI

Jim2007

Honda99ce wrote: »

Just wondering if I can change who my mortgage bank is now or come out of the fixed rate without a penalty as its Ulster Bank who are leaving and not me???

Ask them and see what they say. But even if they leave, they are not in breach of their contract with you, so unless they are nice guys...

gomamochi1

Honda99ce wrote: »

Currently in year 2 of a 7 year fixed mortgage with Ulster Bank. I have been informed terms and conditions will remain the same even with takeover.

I am on a hight interest rate due to the 7 year fixed. I see rates of 2.2% now

Just wondering if I can change who my mortgage bank is now or come out of the fixed rate without a penalty as its Ulster Bank who are leaving and not me???

Thanks

Exact same position now although we have a ltv less than 30% so avant money seem to have a lower rate again !!

JTMan

Honda99ce wrote: »

Just wondering if I can change who my mortgage bank is now or come out of the fixed rate without a penalty as its Ulster Bank who are leaving and not me???s

I have a fixed rate mortgage with Ulster Bank too.

The CBI have said, according to the media, that those with fixed rate mortgages should be able to leave penalty free.

I phoned Ulster Bank yesterday on this.

Ulster Bank said that while it is still unclear what is happening with the mortgages they cannot let me, at this stage, exit without a penalty. They said that their "position may change" when it is known that is happening.

i.e. very likely that fixed rate mortgage holders will be able to exit penalty free once the PTSB acquisition of the mortgages is confirmed.

Sheep Shagger

JTMan wrote: »

The CBI have said, according to the media, that those with fixed rate mortgages should be able to leave penalty free..

This does not sound right, "according to the media" is not reliable.

the_amazing_raisin

Honda99ce wrote: »

Currently in year 2 of a 7 year fixed mortgage with Ulster Bank. I have been informed terms and conditions will remain the same even with takeover.

I am on a hight interest rate due to the 7 year fixed. I see rates of 2.2% now

Just wondering if I can change who my mortgage bank is now or come out of the fixed rate without a penalty as its Ulster Bank who are leaving and not me???

Thanks

They haven't actually changed anything yet, they've just said they're leaving. So if you leave now then you're liable to pay fees



Anyone who buys the mortgage will have to respect the terms and conditions. If they try to change anything then they're in breach of contract, which will probably allow you to leave without paying penalty. But of course, it'll be up to you to prove this if it happens

the_amazing_raisin

gomamochi1 wrote: »

Exact same position now although we have a ltv less than 30% so avant money seem to have a lower rate again !!

I looked at Avant a while back and was put off by their early repayment limit. They only allow an overpayment of 1% during the fixed term. UB allow 10% per year, very valuable if you're in a position to put extra money into your mortgage

loyatemu

there's a fixed formula for deciding the cost of breaking out of a fixed rate, based on the current lending rates. Ask them what the break fee is, it might not be that high, it might even be zero.

JTMan

Sheep Shagger wrote: »

This does not sound right, "according to the media" is not reliable.

It is right. The media did report this.

Charlie Weston in the Indo reported here "Borrowers should not be charged thousands of euros to exit Ulster Bank mortgages after the bank’s decision to quit the market, regulators believe" and "the Irish Independent understands from senior sources that the Central Bank believes levying fees and charges on customers is not appropriate because it is the bank which wants out of the relationship with borrowers."

Sheep Shagger

JTMan wrote: »

It is right. The media did report this.

Charlie Weston in the Indo reported here "Borrowers should not be charged thousands of euros to exit Ulster Bank mortgages after the bank’s decision to quit the market, regulators believe" and "the Irish Independent understands from senior sources that the Central Bank believes levying fees and charges on customers is not appropriate because it is the bank which wants out of the relationship with borrowers."

Why should a bank waive fees if a customer wants to exit a fixed rate agreement early just because they are selling the loan book?

Bizzare thought process from the regulator, sets a precedent if it does actually happen.

silver2020

JTMan wrote: »

It is right. The media did report this.

Charlie Weston in the Indo reported here "Borrowers should not be charged thousands of euros to exit Ulster Bank mortgages after the bank’s decision to quit the market, regulators believe" and "the Irish Independent understands from senior sources that the Central Bank believes levying fees and charges on customers is not appropriate because it is the bank which wants out of the relationship with borrowers."

Charlie Weston is a nice guy, but his reports are very much written to give the impression that something is one way when the truth is totally different.

Very much the style of the indo.

He probably rang the CB, said "shouldn't they do this" the CB person said, yes they should.

But that's just an opinion and Weston tries to present this as an official line. Its not.

There is a break fee formula in the terms and condition. If UB are told to change this, then why can't they change other terms and conditions? and tell someone with a tracker that its gone? Terms and conditions work both ways.

jj880

I doubt a customer would be happy if a bank decided to move them to a fixed rate from 2 years ago.

JTMan

silver2020 wrote: »

There is a break fee formula in the terms and condition. If UB are told to change this, then why can't they change other terms and conditions? and tell someone with a tracker that its gone?

Nobody is changing the T&C's for break fees.

The T&C's give Ulster Bank the right but not the obligation to charge break fees.

It seems Ulster Bank will waive that right to charge break fees.

I suspect that Charlie is right on this. From speaking to Ulster Bank I got a very clear impression that waiving break fees will happen at a later stage.

Customers who don't want their mortgage sold to permanent tsb or whichever bank it is sold to, should have a right to switch without penalty.

Sheep Shagger

JTMan wrote: »

Customers who don't want their mortgage sold to permanent tsb or whichever bank it is sold to, should have a right to switch without penalty.

Why should they though?

If you are on a fixed rate it doesn't matter who owns your mortgage, as long as you keep your end of the deal (make repayments on time) then its BAU.

I prefer Charlie Weston to the waste of space that is Conor Pope but think he's way off the mark here....Time will tell I guess.

Jim2007

JTMan wrote: »

Nobody is changing the T&C's for break fees.

The T&C's give Ulster Bank the right but not the obligation to charge break fees.

It seems Ulster Bank will waive that right to charge break fees.

I suspect that Charlie is right on this. From speaking to Ulster Bank I got a very clear impression that waiving break fees will happen at a later stage.

Customers who don't want their mortgage sold to permanent tsb or whichever bank it is sold to, should have a right to switch without penalty.

The reality is that none of these people are going to be in the room when the decision is made. Nor will they have any influence on the decision makers.

UB are closing down and beyond complying with the requirements of their banking license, they have no interest in maintaining a relationship with the regulator. The objective for UB is to return the maximum amount of capital to the parent company, decimating the value of the loan book by allowing borrowers to walk is not inline with that objective.

As adults we assume that borrowers were happy to enter into the contracts they signed up to and were willing to accept the terms and conditions offered. As none of those terms will change, there is no justification for people to expect that they should be able to breach their contract without penalty just because they feel like it.

I expect it will come down to the numbers involved in the end. If it is a small number the change of fees are small. If however the feels a major block of the loan book will walk, there is a good chance fees will be charged.

Q&A

Jim2007 wrote: »

As adults we assume that borrowers were happy to enter into the contracts they signed up to and were willing to accept the terms and conditions offered. As none of those terms will change, there is no justification for people to expect that they should be able to breach their contract without penalty just because they feel like it..

Spot on, I couldn't agree more. The only problem is when it comes to mortgages we as a country have moved so far away from personal responsibility.

We're the people who didn't know what a tracker mortgage was not too mention where every one was mis-sold mortgages. "No one ever told me I had to pay it back or if I didn't they'd try and take the keys off me" has been heard time and again. So our approach is to come up with a system that avoids repossessions - great for a small number of households but bad for banks and the rest of Irish households.

The CBI leaning on Ulster to wave break fees only reinforces the view Ireland is toxic when it comes to lending.

gomamochi1

cruisey1987 wrote: »

I looked at Avant a while back and was put off by their early repayment limit. They only allow an overpayment of 1% during the fixed term. UB allow 10% per year, very valuable if you're in a position to put extra money into your mortgage

Also avant only cover urban centres and wont loan to people living in 16 rural counties as I was informed today by a broker for avant. Though I reckon it may change once ub leave the market.

poolfandar

Got a mortgage redemption figure today, 2.5 years into 5 year fixed at 2.95, €2778 breakage fee!

Sheep Shagger

poolfandar wrote: »

Got a mortgage redemption figure today, 2.5 years into 5 year fixed at 2.95, €2778 breakage fee!

Presumably it won't be worth you moving as any saving wouldn't make up that break fee?

poolfandar

Yeah be no point at this stage, hopefully when they're selling their loan book the might waive the fees!

Sheep Shagger wrote: »

Presumably it won't be worth you moving as any saving wouldn't make up that break fee?

lawred2

poolfandar wrote: »

Got a mortgage redemption figure today, 2.5 years into 5 year fixed at 2.95, €2778 breakage fee!

they have been a bit of an outlier in the Irish market for a while now

We've exited both BOI and PTSB in recent years without any break fee.. I believe AIB are the same

lawred2

lawred2 wrote: »

they have been a bit of an outlier in the Irish market for a while now

We've exited both BOI and PTSB in recent years without any break fee.. I believe AIB are the same

Did they both just ignore their published break fee calculators? How far were you into the fixed term?

Q&A

[Deleted User] wrote: »

Did they both just ignore their published break fee calculators? How far were you into the fixed term?

I've never heard of a bank ignoring a break fee. I have heard of plenty of situations where the break fee calculation are zero.

Sheep Shagger

Q&A wrote: »

I've never heard of a bank ignoring a break fee. I have heard of plenty of situations where the break fee calculation are zero.

Is usually based on cost of funds at the time.

If it's in the banks interest to get out of a fixed rate they'll waive any fees...if its going to cost then then they'll apply the break fee. This is why I can't see Ulster Bank giving a blanket 'its free to exit all fixed rates'.

Of course paying a break fee can still be worth it in the long run depending on what rate you are moving too (or if you can afford to repay in full early!).

Always worth asking.

lawred2

Deleted User wrote: »

Did they both just ignore their published break fee calculators? How far were you into the fixed term?

actually you're right - I misread my UB contract. I thought they weren't using that calculator at all.

My contract says "break fee is 6 months interest"

But further down I've noticed it also says "or the early redemption charge whichever is lower..."

That must be the calculator

In both cases that we did exit - I was less than half the way through the fixed rate term

Nobotty

poolfandar wrote: »

Got a mortgage redemption figure today, 2.5 years into 5 year fixed at 2.95, €2778 breakage fee!

You'd be better off waiting the 2.5 years as Ulsterwill be that long and more winding down

Question,and apologies if its been asked already,can you transfer your business to the nearest branch if its actoss the border? Including the mortgage

lawred2

Nobotty wrote: »

You'd be better off waiting the 2.5 years as Ulsterwill be that long and more winding down

Question,and apologies if its been asked already,can you transfer your business to the nearest branch if its actoss the border? Including the mortgage

Well not necessarily - that break fee will decrease over time.. At some point it can make sense financially to take the hit.

Might even make sense now to that poster.

Sheep Shagger

Nobotty wrote: »

Question,and apologies if its been asked already,can you transfer your business to the nearest branch if its actoss the border? Including the mortgage

No - different legal entities (and currencies), essentially two different banks.

Q&A

Q&A wrote: »

I've never heard of a bank ignoring a break fee. I have heard of plenty of situations where the break fee calculation are zero.

Looking at the formula used by my provider (EBS) I don't see how the calculation would be ever zero except towards the end of the fixed rate term.

loyatemu

poolfandar wrote: »

Yeah be no point at this stage, hopefully when they're selling their loan book the might waive the fees!

what's your LTV?

KBC are paying 3K to switchers and have a 2.25% 3 year rate, you should be able to get the legal end done for a grand if you shop around.

Q&A

[Deleted User] wrote: »

Looking at the formula used by my provider (EBS) I don't see how the calculation would be ever zero except towards the end of the fixed rate term.

My break free had steadily increased over the last 18 months. The increase in break free is due to reductions in interbank rates.

I'm not sure what the EBS calculation says. lenders are required to only charge a break free equivalent to the cost they face due to the early repayment. If interbank rates/ funding costs have gone down since you borrowed you'll have a charge. If they have gone up the break free should be zero.

The following does a much better job of explaining it:

https://www.askaboutmoney.com/threads/understanding-fixed-rates-breakage-costs.204427/


Basically what the interbank rate was on the day you took out your loan versus today's rate will decide your break fee today.

So unless people have the exact same fixed rate mortgage (start date, term and break date) any personal experience discussed here are not directly comparable.