Ulster Bank is allowing tracker mortgages to be transferred to a new house

Brendan Burgess

Brendan Burgess

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If you have an Ulster Bank tracker and you want to trade up, you can now do so. You will keep the tracker rate on the existing mortgage and pay the higher svr on the new mortgage.

It won't apply to people in arrears.
It won't apply to investment properties - obviously.

I am trying to get the official press release

Brendan
 
Would be interested to know how this would work for people in Negative Equity ?

Also say if someone wanted to sell their house (with a Tracker Mortgage) first and then buy a few months later or would the sell and buy transaction need to be done at the same time ?

How would it work for people trading down - if they did not need to get additional funds on the Variable Rate ?
 
Thats certainly progress and good news for those who have trackers with UB..wonder if PTSB and or others will follow suit..
 
Can someone explain how this would work?

I currently have a tracker with UB with ~280k remaining, house probably worth about 150k.
 
plant43 said:
I currently have a tracker with UB with ~280k remaining, house probably worth about 150k.
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I haven't got the press release yet, but I am guessing the following

Let's say you want to buy a house worth €250k...

House |250k
tracker element| 280
SVR element |100
Total|380
Loan to value |152%

If you meet their lending criteria for a €380k mortgage, they will lend you the money.

Brendan
 
OK, here is the press release

ULSTER BANK LAUNCHES NEW PORTABLE OPTION FOR TRACKER MORTGAGE CUSTOMERS​
- Ulster Bank Tracker Mortgage Customers will be able to keep their existing tracker when buying a new home – ​
​
28th March 2012: Ulster Bank has today announced a new initiative designed to help its customers move house. The Bank is now offering its existing tracker mortgage customers the opportunity to take the benefits of their tracker mortgage with them when buying a new home.
This initiative is the first of its kind to be offered in Ireland and Ulster Bank is making the option available to all of its customers seeking to move, whether upgrading to a larger family home or trading down.
Commenting, Jim Ryan, Head of Branch Banking at Ulster Bank said: “In Ulster Bank we recognise that many of our tracker customers will want to move for a variety of reasons. We are pleased to be able to help our customers do this, by offering them a real chance to move by taking their tracker with them to their new home. Until now these customers will have been reluctant to move for fear that they would lose their tracker mortgage.”

“In 2012, we are aiming to double our mortgage lending. Whilst market demand remains relatively low, Ulster Bank has seen increased activity from those looking to return to the housing market. We are keen to help as many customers as possible and this is just one of a number of initiatives Ulster Bank is currently offering customers to help them buy a new home. It will assist those who are thinking of moving house but who are reluctant to lose the excellent value they currently have from their Ulster Bank tracker mortgage,” he continued.

How it works
If upgrading and increasing the overall amount of mortgage borrowing, customers will be able to keep their existing tracker mortgage rate for an amount equivalent to their existing tracker mortgage balance, with any additional borrowing being subject to Ulster Bank’s new business rates.

If a customer is interested in reducing their overall borrowing by trading down, the option to port their tracker rate to their new home is also available.


Eligibility
This option is available to all Ulster Bank tracker mortgage customers who are up-to-date with their existing mortgage payments and seeking a residential mortgage for use as a principal private residence. Overall mortgage eligibility remains subject to Ulster Bank’s standard credit and affordability criteria.
 
Hi Brendan,

I haven't seen the press release - just this piece which presumably was quoting from the release.

My reading of the article would be: -

  • Ulster Bank are not saying they're getting into negative equity lending. If you're in negative equity and want to trade up, you'll have to come up with sufficient cash to get yourself out of negative equity.
  • They may or may not lend to reluctant landlords. This new deal might just be for people who are selling their existing property and getting a new mortgage to buy their new one.
 
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Its fantastic news for those who have trackers with UB and want to move to a bigger/smaller/more appropriate house and for those with UB who need to move for work reasons..for once the news from a bank is good news.Thanks Brendan for the heads up..(Have to wait and see if PTSB will do the same ).
I have thought about moving but as we have the tracker rate,I wouldn't dare mess with it..but this makes it possible,even if we never get to take advantage of it,it means that people are not so stuck..
 
LDFerguson said:
  • Ulster Bank are not saying they're getting into negative equity lending. If you're in negative equity and want to trade up, you'll have to come up with sufficient cash to get yourself out of negative equity.
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Hi Liam

I don't think that this correct. UB wants to do negative equity mortgages in exceptional circumstances. In the case I outlined above, the borrower will have to be able to comfortably meet the stress test borrowing limits on a €350k mortgage. If so, I think that they will be allowed to transfer their negative equity.

I have no doubt that most people applying for negative equity mortgages will be refused on affordability grounds.

I would guess that there be two big users of this new product


  1. People with a cheap tracker and plenty of equity in their home who want to trade up and will still have equity
  2. People who are in negative equity who want to move house but without significantly increasing their borrowings.

They may or may not lend to reluctant landlords. This new deal might just be for people who are selling their existing property and getting a new mortgage to buy their new one.
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This is for people who want to move home.

It is not for investors.

If a borrower has rented out his home and bought a new one, then the former home is an investment property.

If they have rented out their former home and are now renting, I would guess that the UB will allow them to sell the home and trade up or down. But I don't know.

Brendan
 
I think it makes things much more difficult for the government.

It will be argued that if a British state owned bank can do this, why can't an Irish state owned bank do this?

If the tracker mortgages are moved from AIB and PTSB to the IBRC, they will be anxious to run down the mortgage book as quickly as possible and will not be providing additional finance.

This move creates headaches for the government and for the other banks.

Brendan
 
I wonder how the repayments will work on these new split mortgages? Would all the repayments go towards the tracker balance first, or be split based on the balances?
 
The principal of the lender allowing for the replacement of security on a tracker is important whether the tracker is for PPR or buy to let.

Legal advice to me recently was that the lender could not replace security even though I was told by U.B. H.O. that this was possible. I had not proceeded further with negotiations on this legal advice but will now pursue on the basis of today's news.
 
ryaner said:
I wonder how the repayments will work on these new split mortgages? Would all the repayments go towards the tracker balance first, or be split based on the balances?
Click to expand...

I had a chat with them and I got the impression that all the details had not been worked out. but it seems reasonable that you will in effect have two mortgages - Your €200k tracker and your €100k SVR. Each will have a separate repayment.

I also asked what would happpen if someone goes into arrears but makes some payment.
And what happens if someone wants to pay a lump sum off their mortgage - would it go off the SVR or off the tracker.

I think we have to wait until we see the actual product launch.

Brendan
 
UB New mortgage proposal

If it's true that they won't facilitate negative equity mortgages, it seeems a bit pointless, most tracker holders are the ones in negative equity due to the timing of when trackers first came out - certainly reduces the pool of people to whom this will make any difference!
 
This makes no sense to me.

The Central Bank has approved negative equity mortgages.

Why would they not approve them for people with trackers?

In reality, someone who has a tracker is actually in less negative equity than someone with an SVR.
 
Maybe Ulster Bank don't want those in NE availing of this. Are we interpreting too much on Ulster Bank's behalf on the intentions of this move?

It may be a means to (slightly) offset the unprofitable nature of trackers.

1. They will allow trading down, as it reduces the size of the tracker even if it doesn't remove the tracker mortgage itself.
2. They'll allow trading up for good candidates with impeccable payment records and who are deemed low risk. This means they at least get a profitable variable on top of the unprofitable tracker.

The bank should naturally be reluctant to allow 150% LTVs to arise for people who are a paycut away from struggling to meet their (much increased) mortgage repayments.
 
Brendan Burgess said:
I had a chat with them and I got the impression that all the details had not been worked out. but it seems reasonable that you will in effect have two mortgages - Your €200k tracker and your €100k SVR. Each will have a separate repayment.

I also asked what would happpen if someone goes into arrears but makes some payment.
And what happens if someone wants to pay a lump sum off their mortgage - would it go off the SVR or off the tracker.

I think we have to wait until we see the actual product launch.

Brendan
Click to expand...

Seems a bit too good to be true but if they allow the full proceeds from the sale of the house to reduce the new borrowing, as their release suggests, it is very tempting indeed.

I imagine in reality some of the proceeds will have to be used to reduce the existing tracker/level of borrowing. Maybe it can still work given how far house prices have fallen.
 
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Hi Looking for some advice please re Uls Tracker

We are in Positive Equity and no arrears

We have a tracker, and want to buy a bigger house, we have savings , which would cover the bigger house, the plan was to sell smaller house (Tracker on this house) and bank the proceeds , sale value less outstanding mtg amount

We are thinkng, can we transfer the tracker to new house, without taking out an additional mtg

If it is a stipulation, that an additional mtg is taken out, what is the minimum additional mtg, we would need to take out

Can we redeem , pay off the additional mtg, ideealy sooner rather than later, leaving us with our tracker only (on the new house)

Thanks
 
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