# How will First Active Offset Mortgages be impacted by the withdrawal of Ulster Bank?



## Puddle duck (19 Feb 2021)

could anyone send me on any t's and c's they have for offset product? ... with the likelihood of mortgage getting sold i want to make sure I have original doc in case I have issues later on with product features.


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## Monbretia (19 Feb 2021)

Puddle duck said:


> could anyone send me on any t's and c's they have for offset product? ... with the likelihood of mortgage getting sold i want to make sure I have original doc in case I have issues later on with product features.


I wonder will any of it still stand other than the tracker rate guarantee?  These mortgages are gong to be slightly more complicated for UB to deal with than the standard stuff as they are linked to current/savings accounts.   I have several booklets relating to the product but of course there is the caveat in them that they can change anything pretty much at will especially in relation to the current account part, sure they brought in charges on those even though originally we were assured that the c/a linked to offset would have no charges!  

If there is a particular part of the t&cs you want I can scan it and send but they are big booklets with lots of pages most of it just generic stuff.


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## Brendan Burgess (19 Feb 2021)

This will be a real problem for Ulster Bank.

You should consider offering to redeem the mortgage for a substantial discount.

Brendan


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## Monbretia (19 Feb 2021)

Lovely in theory if you had the money to do so!  If not then you lose the tracker rate by refinancing elsewhere so depending on balance/term the discount might need to be substantial and I doubt they have figured out yet what they will do with them.  Plus there is the advantages of an offset as in the facility drawdown and the transferability to a new property, depending on who takes over mortgages it's hard to imagine these being possible unless an existing lender takes over them.

I'd hold tough for a while and see what happens, staff won't know yet so no point asking, they heard the news on the radio this morning together with the general public!


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## EmmDee (19 Feb 2021)

Brendan Burgess said:


> This will be a real problem for Ulster Bank.
> 
> You should consider offering to redeem the mortgage for a substantial discount.
> 
> Brendan



It wasn't a problem for Danske - they just stated they didn't offer current accounts any more so no more offset mortgage. They moved it to standard variable but did discount the rate by 50bps or so.


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## Brendan Burgess (19 Feb 2021)

Monbretia said:


> If not then you lose the tracker rate by refinancing elsewhere so depending on balance/term the discount might need to be substantial



It would not have to be as substantial as it was some years ago.


There are now rates of 1.95% available so the tracker is less valuable 
These mortgages have less than 15 years to run (Assuming 30 years mortgage issued 15 years ago.) 
The balance is much reduced now. 
The repayment on €100,000 over 15 years at 1% would be €600 a  month 

The repayment on €94,000 over 15 years at 1.95% would also be €600 a month.

Not sure how to value the offset bit.  A lot of people have big savings now. 

If you have €100k at 1% with 15 years to go and €100k in savings anyway, offsetting the interest, you should grab a discount of 6% with both hands.

Brendan


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## RedOnion (19 Feb 2021)

For clarity, the removal of the Danske offset *was *an issue, and UB will be looking at this carefully to avoid the same issues.

Initially in 2013 they tried a blanket removal of the offset, with a reduction in the SVR rate to compensate.  I'm not sure if tracker mortgages were included at that time.
@PadKiss represented a number of affected borrowers, and in 2014 the facility was reinstated, but with a rather limited account, administered by Pepper (only 1 withdrawal allowed per month).  All customers should have been notified, and offered the opportunity to have the offset reinstated, but at the higher rate.
Then in 2019 when Danske were closing operations, they offered discounts to some customers to repay their offset mortgages, in one case I'm aware of the discount was 30% of the remaining balance.
Here were the updated special terms in August 2014 https://www.danskebank.ie/PDF/2014/...itions-for-Danske-Mortgage-Offset-Account.pdf

And a thread here at the time: https://www.askaboutmoney.com/threads/keeping-your-offset-mortgage-with-danske-bank.189269/


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## Monbretia (19 Feb 2021)

Mine is small so doesn't matter in overall scheme of things and I can afford to pay it off if needs be, I pay no interest at all on it for many years now so getting as good a rate is impossible as such.  I have availed of a facility drawdown in past few years and may have done so again, at least the option was there.

My sibling though has a good 150k o/s still and makes good use of the offsetting arrangement and in particular the available funds option, most recently to use in place of a car loan.


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## RichInSpirit (19 Feb 2021)

Listening to UB's announcement it looks like it's going to take a few years for UB to exit Ireland and so I intend to do nothing, just keep paying the mortgage.


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## Puddle duck (19 Feb 2021)

not in a position to pay off..in fact i've just topped up via the drawdown the facility. I would like to 'port' in the future so if you could send me any porting t's and c's that cover the fact that they will remortgage the new house at a tracker rate i.e. not just port the balance of current mortgage. 
i was hoping that the fact that UB managed to take on these loans from first active and honoured the terms ...sets precedent?
Also thanks for answering the current a/c charge - I had wondered about whether that was an error or not.


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## RedOnion (19 Feb 2021)

Puddle duck said:


> i was hoping that the fact that UB managed to take on these loans from first active and honoured the terms ...sets precedent?


No, because that was a merger rather than a portfolio sale.


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## Monbretia (19 Feb 2021)

Puddle duck said:


> not in a position to pay off..in fact i've just topped up via the drawdown the facility. I would like to 'port' in the future so if you could send me any porting t's and c's that cover the fact that they will remortgage the new house at a tracker rate i.e. not just port the balance of current mortgage.
> i was hoping that the fact that UB managed to take on these loans from first active and honoured the terms ...sets precedent?
> Also thanks for answering the current a/c charge - I had wondered about whether that was an error or not.



Moving the mortgage to another house is not mentioned in the t&c booklet as far as I remember but I'll have another look, it's mentioned in a brochure that was issued at the time.   Not sure if I'm picking you up correctly but it only entitles you to transfer the outstanding amount on the existing mortgage to the new house, it does not mean a full mortgage/remortgage on new house at the tracker rate.   Only the outstanding amount on the existing mortgage retains the rate, any extra you may need to buy the new house will be a separate additional mortgage at today's rates.

So, 100k o/s and you buy house for 200k and have 100k savings then old 100k transfers and remains the same on new property.

100k o/s and you buy house for 300k and have 100k savings but need to increase borrowing to 200k then existing 100k on offset transfers at same rate but new 100k borrowing needed is at todays rates and is separate.


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## Donald (20 Jul 2021)

Puddle duck said:


> could anyone send me on any t's and c's they have for offset product? ... with the likelihood of mortgage getting sold i want to make sure I have original doc in case I have issues later on with product features.


Desperately looking for first active terms and conditions


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## Donald (20 Jul 2021)

Monbretia said:


> I wonder will any of it still stand other than the tracker rate guarantee?  These mortgages are gong to be slightly more complicated for UB to deal with than the standard stuff as they are linked to current/savings accounts.   I have several booklets relating to the product but of course there is the caveat in them that they can change anything pretty much at will especially in relation to the current account part, sure they brought in charges on those even though originally we were assured that the c/a linked to offset would have no charges!
> 
> If there is a particular part of the t&cs you want I can scan it and send but they are big booklets with lots of pages most of it just generic stuff.


Would you be able to email complete booklet and i would pay any costs involved thank you


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## Puddle duck (8 Sep 2022)

Hi 

Just picking this back up again and wondering if I should be fixing or holding onto my First Active offset? I topped up my mortgage about 1 year ago using the pre-the approval feature (very handy) so current balance is approx E130k and my tracker rate is 1.15 above ECB. I have moved jobs so if wanted to fix do I have to wait until my probation is completed i.e. full mortgage application? Thanks


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## skrooge (8 Sep 2022)

Puddle duck said:


> Hi
> 
> Just picking this back up again and wondering if I should be fixing or holding onto my First Active offset? I topped up my mortgage about 1 year ago using the pre-the approval feature (very handy) so current balance is approx E130k and my tracker rate is 1.15 above ECB. I have moved jobs so if wanted to fix do I have to wait until my probation is completed i.e. full mortgage application? Thanks


If you're switching product not provider then it's not a full application just a change of rate. No need to wait for probation or anything like that.

Should you fix is a different question. As you're on a tracker consider posting in the forum below.






						Key Post - Should borrowers with trackers consider fixing? (General guidelines)
					

It seems increasingly likely that we are going to see a series of rate hikes by the ECB in the near future.  According to Philip Lane, ECB chief economist - "I think it’s clear that at some point we’re going to be moving rates, not just once, but over time, in a sequence."  If the ECB raise the...



					www.askaboutmoney.com


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## Puddle duck (8 Sep 2022)

Brilliant- thank you


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## aoraki (24 Sep 2022)

Brendan Burgess said:


> This will be a real problem for Ulster Bank.
> 
> You should consider offering to redeem the mortgage for a substantial discount.
> 
> Brendan


Resurrecting this post because there has been some developments with the Ulster Bank Offset Mortgage situation.  Full disclosure - I have one of these mortgages.  I got a letter this week from Ulster Bank providing an update on this matter.  They have agreements with AIB and PSTB to transfer their performing Tracker and Non-tracker mortgages to them.  They also said that they are not currently asking Offset Mortgage holders to close their Current or Savings accounts with them, as they are with normal account holders.  As this would result in the loss of the Offset benefit.  For Offset Mortgage customers it's basically "As you were", but they did say there would be another update on the situation later in 2022.

I'm curious in particular by the comment from Brendan I replied to, with regards to potentially making a deal with the bank to redeem the mortgage for a discount.  If for arguments sake (ahem!) you were fully offsetting your mortgage and had a decent amount of time left on the payment schedule (20 years), would that make the bank more amenable or less amenable to make such a deal?  Bearing in mind that interest rates are on the up and will probably go up again?  Would be curious to hear peoples take on this.  Thanks in advance.


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## Monbretia (24 Sep 2022)

Personally I think it would be a waste of time trying to make a deal, I doubt there is any decision maker in the country who can approve that within the bank, it would have to go to UK and that takes forever and probably nobody there going to make a decision either!  

Anything outside the norm just gets kicked around from desk to desk and nobody is going to give the go ahead, much as it has been for a long time with UB/RBS.   

In some ways unless they got rid of them all by making or accepting an offer then it's just as much hassle to try and manage 10 as 100 for them so what's the incentive for them.


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## aoraki (24 Sep 2022)

Monbretia said:


> Personally I think it would be a waste of time trying to make a deal, I doubt there is any decision maker in the country who can approve that within the bank, it would have to go to UK and that takes forever and probably nobody there going to make a decision either!
> 
> Anything outside the norm just gets kicked around from desk to desk and nobody is going to give the go ahead, much as it has been for a long time with UB/RBS.
> 
> In some ways unless they got rid of them all by making or accepting an offer then it's just as much hassle to try and manage 10 as 100 for them so what's the incentive for them.


Ah yeah, fair enough, I realise it’s highly unlikely for anything like that to happen. I just don’t see how they are making anything but a loss on this, in my case anyway. I’m not paying any interest or bank charges on this and don’t intend on doing so for the remaining term of 20 years. I guess we’ll see how this plays out over the next while. But if they are happy to continue doing this (or find another Financial Institution to take the mortgage on) then I’m also happy.


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## Monbretia (24 Sep 2022)

aoraki said:


> Ah yeah, fair enough, I realise it’s highly unlikely for anything like that to happen. I just don’t see how they are making anything but a loss on this, in my case anyway. I’m not paying any interest or bank charges on this and don’t intend on doing so for the remaining term of 20 years. I guess we’ll see how this plays out over the next while. But if they are happy to continue doing this (or find another Financial Institution to take the mortgage on) then I’m also happy.


I pay no interest either although there is a €2 monthly charge on the facility account!

They never seem to have made decisions based on logic as to whether something like that was profitable or not in some individual cases.   A crazy situation years ago was where customers legal fees were paid and I think there was a cash incentive to move mortgages, similar to now, but it also applied between UB/First Active which were both owned by RBS so you could be switching back and forth to your hearts content and there was not an extra bob in it for RBS only costs each time, mad stuff!   Logic would say it should only have applied to non RBS banks switching to UB/FA


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## aoraki (24 Sep 2022)

Monbretia said:


> I pay no interest either although there is a €2 monthly charge on the facility account!
> 
> They never seem to have made decisions based on logic as to whether something like that was profitable or not in some individual cases.   A crazy situation years ago was where customers legal fees were paid and I think there was a cash incentive to move mortgages, similar to now, but it also applied between UB/First Active which were both owned by RBS so you could be switching back and forth to your hearts content and there was not an extra bob in it for RBS only costs each time, mad stuff!   Logic would say it should only have applied to non RBS banks switching to UB/FA


That’s pretty nuts alright! I’m guessing your offset account is a current account? I have 3 savings accounts and they are not charging me anything for them, so far at least.

As a product it seems like the Offset Mortgage is very advantageous to the customers who took one out. Most bank products are heavily skewed towards making the bank a lot of money. Seems like they got this one wrong. Not that I’m complaining, long may it continue!


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## llgon (24 Sep 2022)

Danske were in the same situation with Offset Mortgages a few years ago as Redonion referred to earlier in the thread. Here is a link to another thread about their efforts to solve that problem.






						Danske Bank offset mortgage - offered 30% discount to clear early
					

Recently I received an offer from Danske bank offering approx 30 % writeoff if I move away from them as they want to shut non corp banking. Should I accept as approx 60 k left on mortgage?



					www.askaboutmoney.com
				




 I would expect that if Danske had no option except to offer a substantial discount, Ulster will be in the same position.   If they had found another institution willing to take over the offset mortgages I'm sure the deal would have been done by now. They probably don't want to offer the discount until they've offloaded the rest of their mortgages or they risk being inundated with other customers looking for the same.


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## wannapress1 (24 Sep 2022)

I'm assuming they cant break the offsetting t's & c's if the mortgage is taken on by someone else. I wouldn't think there are many of these with 20+ years remaining as i reckon this was pulled around 2008 .


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## aoraki (24 Sep 2022)

llgon said:


> Danske were in the same situation with Offset Mortgages a few years ago as Redonion referred to earlier in the thread. Here is a link to another thread about their efforts to solve that problem.
> 
> 
> 
> ...


Wow, that is interesting. Obviously just because this happened with Danske doesn’t mean  that UB will do the same thing. But very interesting to see another financial institution taking that approach and pretty recently too. I guess it depends on a lot of things, how many of these offsets they have, remaining terms, how badly UB just want to be finished with the Irish market etc. Time will tell.


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## Monbretia (24 Sep 2022)

aoraki said:


> That’s pretty nuts alright! I’m guessing your offset account is a current account? I have 3 savings accounts and they are not charging me anything for them, so far at least.
> 
> As a product it seems like the Offset Mortgage is very advantageous to the customers who took one out. Most bank products are heavily skewed towards making the bank a lot of money. Seems like they got this one wrong. Not that I’m complaining, long may it continue!


I had both types, the current facility account and the savings accounts, up to 5 accounts if I remember correctly could be offset, I have closed all the savings bar one and left it and the current/facility account there.

It was a great product but a hard sell!  Very few people actually went for it, fear of the unknown I'm sure, it wasn't the standard type of mortgage and the fact that it couldn't be fixed put a lot of people off.   The easiest to convince were those that had lived in Australia as there was a similar product there which was very good.   Add to that those that never used it correctly and I'd say there are a very small percentage of those mortgages actually being used to the full benefit of the customer.    I even have a friend with one who still gets  car finance every time car is changed rather than drawing down some of the facility at home loan rate and they should know better!


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