# Ask Ulster Bank for a discount to redeem mortgage



## QWERTYKEYBOARD (19 Feb 2021)

Hi All, 
Any chance UB would be open to offers on outstanding mortgage balances?
Say you owe then 200K,  offer then 150K.
Get the 150K from different bank via new mortgage.
If yes -  would it be worth if if you have a tracker? 
Rgs, Sean.


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## Pinoy adventure (19 Feb 2021)

I can't see that happening


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## noproblem (19 Feb 2021)

QWERTYKEYBOARD said:


> Hi All,
> Any chance UB would be open to offers on outstanding mortgage balances?
> Say you owe then 200K,  offer then 150K.
> Get the 150K from different bank via new mortgage.
> ...


There's only one way to find out and it will be interesting to read the reply you get. Good luck.


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## Leper (19 Feb 2021)

If I know the banks . . . your UB mortgage may be heading for a Vulture Fund. Sorry!


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## EasilyAmused (19 Feb 2021)

The banks didn’t do deals like this during the banking crisis, they’re unlikely to do them now.
IMO if you offered UB €200k they’d refuse.


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## HollowKnight (19 Feb 2021)

EasilyAmused said:


> The banks didn’t do deals like this during the banking crisis, they’re unlikely to do them now.
> IMO if you offered UB €200k they’d refuse.


Except they can't refuse if you want to pay in full. They calculate a break fee if applicable.


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## EasilyAmused (19 Feb 2021)

HollowKnight said:


> Except they can't refuse if you want to pay in full. They calculate a break fee if applicable.



Very true. My mistake.


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## Merowig (19 Feb 2021)

No reason for any bank to do that. Why should they?
That is an offer easily to be refused.
If you are on a fixed rate you can overpay and as stated here you might look to have to pay a break fee.


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## Niall56 (19 Feb 2021)

I know someone who got about €10,000 written off their mortgage when Danske left but the mortgae balance was pretty small at that stage- under €50,000. I can't see a bigger operator doing that.


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## Steven Barrett (19 Feb 2021)

Niall56 said:


> I know someone who got about €10,000 written off their mortgage when Danske left but the mortgae balance was pretty small at that stage- under €50,000. I can't see a bigger operator doing that.


That's still a 20% discount, which is pretty good. 

It is pointless just picking a round figure. It won't be taken seriously. Work out the net present value of the total repayments that are due and offer them something a bit over that. That way they still make a profit on the amount. They all have deep pockets and have absolutely no reason to give you a discount on a performing loan.


Steven
www.bluewaterfp.ie


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## _OkGo_ (19 Feb 2021)

QWERTYKEYBOARD said:


> Any chance UB would be open to offers on outstanding mortgage balances?
> Say you owe then 200K, offer then 150K.
> Get the 150K from different bank via new mortgage.
> If yes - would it be worth if if you have a tracker?


The chances are very very close to zero...

If you are in a position to get a new mortgage of €150k then you are not really in any financial difficulty and UB would have no incentive to do this. 

Even the mechanics of it would not work as for a switcher (as I understand it), the new loan amount needs to match the existing loan amount. So you would need UB to write off €50k on the assumption that you follow through and switch.


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## Brendan Burgess (19 Feb 2021)

1)  Performing non-tracker mortgages are very profitable. I suspect that the buyer will pay a small  premium for them. So it's unlikely that Ulster Bank would sell for less than the amount owed.

2)  Performing tracker mortgages are a different matter. They are still profitable, but I doubt that they will be sold for their nominal value. 

If I were AIB, I would prefer to buy a portfolio of non-tracker mortgages than tracker mortgages. 

So Ulster Bank should offer a small discount for early repayment of trackers.  The problem with that is that it would be self-selecting. People with no intention of overpaying won't avail of it. People who are planning to trade up, would grab any discount. 

Brendan


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## argolis (19 Feb 2021)

I was told by a vulture fund rep that they wouldn't cut a deal on our performing loan. I couldn't afford it anyway but I was interested to see would they take an instant profit considering they bought the loan book from IBRC for something like 52c on the euro. He did say they had made a number of deals with people with non-performing loans though.

It seems to me that if you don't mind tanking your credit rating for years and are willing to play a game of arrears, court threats, etc, then you might get them to agree to a discount deal but otherwise you're a cash cow. For a non-tracker mortgage that is, as was pointed out above. Also, if you had the money to cut a deal I'm not sure why they wouldn't chase you for it in court but given that he said they had cut discount deals, I assume they'd rather not bother with the hassle and just book their profit there and then....


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## Dazzler123 (19 Feb 2021)

No bank would do a deal of that nature on a performing loan. It doesnt make commercial sense in normal times.

Now, ulster wont do a deal on a performing loan, mainly because for an impending loan sale, which is likely, performing loans increase the value of the potential loan book.


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## skrooge (19 Feb 2021)

If I was NatWest trying to sell a loan book -for a profit I might add - why would I undermine the value of the portfolio by offering unnecessary discounts. 

Yes they want out but they're not stupidly going to burn money running for the exit.


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## NoRegretsCoyote (19 Feb 2021)

argolis said:


> but I was interested to see would they take an instant profit considering they bought the loan book from IBRC for something like 52c on the euro.


That's an *average* for the whole portfolio, not your mortgage.


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## Leper (19 Feb 2021)

Dazzler123 said:


> No bank would do a deal of that nature on a performing loan. It doesnt make commercial sense in normal times.
> 
> Now, ulster wont do a deal on a performing loan, mainly because for an impending loan sale, which is likely, performing loans increase the value of the potential loan book.



Am I right? 
A mortgage is up to date with repayments coming in every month. The good mortgagee wants a deal in which to pay off all he owes early to a bank that's going out of business. And he is not going to get a deal because he has made all his repayments todate.

But, a mortgagee defaults on repayments and the bank will make a deal. 

The overriding message I'm getting is (a) The mortgagee is honest and smart - too bad!
(b) The mortgagee defaults and perhaps through dishonesty - he gets rewarded by the bank.


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## MrEarl (20 Feb 2021)

Hello, 

I have it on very good authority, that UB will not be agreeing to any discounts for early repayments, on performing homeloans - be they trackers, or otherwise.

As mentioned elsewhere, there are issues to be addressed with certain types of homeloans, but it will take a couple of years before those issues are even considered, so don't waste any time asking for discounts, at least this year.


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## QWERTYKEYBOARD (20 Feb 2021)

Thanks all for you inputs - I asked the question originally as I have an offset tracker from first active..   so this thread and the offset tread are very interesting reads...


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## Monbretia (20 Feb 2021)

QWERTYKEYBOARD said:


> Thanks all for you inputs - I asked the question originally as I have an offset tracker from first active..   so this thread and the offset tread are very interesting reads...



Sit tight so and wait and see, the offset will have to have some sort of a fix but could take years, UB/RBS never moved fast and I presume Nat West will be same!


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## Dazzler123 (20 Feb 2021)

Leper said:


> Am I right?
> A mortgage is up to date with repayments coming in every month. The good mortgagee wants a deal in which to pay off all he owes early to a bank that's going out of business. And he is not going to get a deal because he has made all his repayments todate.
> 
> But, a mortgagee defaults on repayments and the bank will make a deal.
> ...



It does seem that way but... its all about repayment capacity.  The good mortgagee has not given the bank any reason to doubt their ability to repay the loan in full.

The bad mortgagee, in not paying the mortgage and showing that they have no capacity to repay over the life of the loan could get a deal.  They will claim family members have given them a lump sum to do a deal.  I would be sceptical of such a story but im suspicious by nature


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## argolis (22 Feb 2021)

NoRegretsCoyote said:


> That's an *average* for the whole portfolio, not your mortgage.


I assumed they negotiated the entire portfolio in one go in which case the average would apply. I'm sure they don't buy mortgages on an individual basis. Are you saying they (vulture funds) bought the mortgages in tranches of different risk/price? I've never seen that mentioned anywhere


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## NoRegretsCoyote (22 Feb 2021)

argolis said:


> I'm sure they don't buy mortgages on an individual basis.


I never suggested otherwise.


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## Sadim (22 Feb 2021)

Leper said:


> If I know the banks . . . your UB mortgage may be heading for a Vulture Fund. Sorry!


And they will get the discount, not the borrower. I'm sure Mr Vulture will pay Xp in the £


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## argolis (22 Feb 2021)

T


NoRegretsCoyote said:


> I never suggested otherwise.


Then maybe you can say what you *are* suggesting?


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## NoRegretsCoyote (22 Feb 2021)

@argolis 

Buying a mortgage portfolio is a bit like buying a sack of spuds.

You know what it weighs, you know how many there are, and that each potato is different.

You can't then take the biggest potato out of the bag and then claim it is representative of the rest.


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## imalwayshappy (22 Feb 2021)

I have a btl with Ulster. It's on tracker. Ulster do not have a copy of the sanction letter as I believe they lost it. I don't have a copy either. Where would this leave me in the event of a loan sale? Thanks


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## Monbretia (22 Feb 2021)

imalwayshappy said:


> I have a btl with Ulster. It's on tracker. Ulster do not have a copy of the sanction letter as I believe they lost it. I don't have a copy either. Where would this leave me in the event of a loan sale? Thanks



Have you tried the solictor that dealt with it, they get a copy of the loan offer letter too in their legal pack.


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## argolis (22 Feb 2021)

NoRegretsCoyote said:


> @argolis
> 
> Buying a mortgage portfolio is a bit like buying a sack of spuds.
> 
> ...



Fair enough, I was just wondering were they purchased in tranches, or some other method, contrary to my understanding.

I get that some are more valuable than others in this sack of spuds but haven't they paid the same rate for each i.e. the average? I'm not trying to claim my mortgage is representative of anything, just that they paid the average value for it. Maybe I'm misunderstanding this or we just have different opinions, I don't know.

In my mind, even if they were to assess and value my mortgage more highly because there hadn't ever been a missed payment on it vs a delinquent one, they might still accept some discounted value to clear it immediately. So, for example, they might accept 85% for a performing loan but 55% for a badly non-performing loan. Having read about how they operate, I thought vulture funds would be interested in a fast turnaround of their investment because they recycle the money into the next "project". Having paid 42 cent on the euro, a year later they'd be getting 85 cent back, thus doubling their investment for a ~ 100% gain. But the rep said they were happy to keep a performing loan on their books.

By the by, I just googled it and it seems they bought the mortgage book for 42 cents on the euro, even more than I remembered! 









						IBRC sold mortgages to Mars at 58% off
					

Mars capital, an unregulated mortgage company, was able to buy almost 1,500 home loans from IBRC for just 42% of the amount owed, even though the homeowners involved remain liable for the full amount




					www.thetimes.co.uk


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## NoRegretsCoyote (23 Feb 2021)

argolis said:


> Having paid 42 cent on the euro, a year later they'd be getting 85 cent back, thus doubling their investment for a ~ 100% gain.


But if they hold you to contractual terms (and you are able to pay) then they will make even more over the lifetime of the mortgage.


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## imalwayshappy (23 Feb 2021)

Monbretia said:


> Have you tried the solictor that dealt with it, they get a copy of the loan offer letter too in their legal pack.


Great idea!


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## argolis (23 Feb 2021)

NoRegretsCoyote said:


> But if they hold you to contractual terms (and you are able to pay) then they will make even more over the lifetime of the mortgage.


If it was viewed as an individual investment, sure, but I don't think that's equating the investment terms. They could either make 100% after one year or, say, 260% over the course of the remaining 15 year term holding my mortgage (I just did some back of the envelope calculations).

If they took a 100% gain after one year and kept recycling it, then they could buy two mortgages, then four, etc. if each mortgage holder agreed to clear their mortgage at a discounted rate. Presuming there continues to be other distressed purchase opportunities available. By recycling the gains over the course of 15 years they'd be looking at 1,000% or more return, compared to 260% from just buying and holding the first mortgage.

That's not how they operate though, they obviously prefer to hang onto the performing loans. Reasons may be 1) cashflow paying a good interest rate 2) there aren't any other distressed markets to buy into right now 3) selling the performing mortgages as part of a portfolio is just easier 4) giving a performing loan a discount incentivises other performers into negotiations or, worst case, becoming non-performing in order to negotiate a discount.

If they could sell some or all of their Irish mortgages and double their money tomorrow and invest the doubled funds into another distressed purchase, I don't know why they wouldn't. I have a layman's understanding, hence I am liable to be wildly wrong.


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## Shazzaqwe (23 Feb 2021)

We have a mortgage of €110K with Ulsterbank on a tracker of 0.75% with about 10 years remaining.
We have €100K in cash.  I would gladly pay them all the cash for no mortgage if I could.
Surely they are losing on our tracker.

I think there are a lot of people like me, with trackers who might trade up, but have decided just to let the tracker play out before trading up.
I know you can keep your tracker as part of the mortgage, but i think it feels cleaner to just play out the tracker before thinking about trading up.


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## skrooge (24 Feb 2021)

Shazzaqwe said:


> We have a mortgage of €110K with Ulsterbank on a tracker of 0.75% with about 10 years remaining.
> We have €100K in cash.  I would gladly pay them all the cash for no mortgage if I could.
> Surely they are losing on our tracker.



Irish banks have more deposits than loans. This means they've money they can't lend. Those deposits are attracting a rate of interest far less than 0.75%. what can they do with this surplus of money? They've a few options:

buy 10 year government bonds - it's bouncing around somewhere between zero or negative rates.

Put this money on deposit with the ECB at -0.5% 

Now imagine you pay them back. They've gone from having an mortgage asset earning a positive rate of return -albeit a low one - to having cash, on top of the rather large pile they already have, that whatever they put it in will end up costing them money.

So the question is why would they offer a discount that is only going to end up costing them further?


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## NoRegretsCoyote (24 Feb 2021)

Shazzaqwe said:


> We have a mortgage of €110K with Ulsterbank on a tracker of 0.75% with about 10 years remaining.
> We have €100K in cash. I would gladly pay them all the cash for no mortgage if I could.
> Surely they are losing on our tracker.


How are they losing? You are paying them about €70 interest a month by DD and they are doing nothing more than sending you a piece of paper once a year. They are raising deposits at less than what you pay them now. Sure, they have fixed costs at portfolio level.  But at loan level their decisions are at the margin, and at the margin your loan is profitable.

And by telling them you can repay early you are also telling them you can afford to pay them on contractual terms.


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## Shazzaqwe (24 Feb 2021)

Good point.
I wonder will it always be that way.
It certainly hasnt been for the life of the mortgage.


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## Donaoib (2 Oct 2021)

I have a tracker mortgage with UlsterBank.  What is happening to the tracker mortgages ? When is Ulster Bank closing there banks in Ireland?


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## skrooge (2 Oct 2021)

Donaoib said:


> I have a tracker mortgage with UlsterBank.  What is happening to the tracker mortgages ? When is Ulster Bank closing there banks in Ireland?


AIB are allegedly going to buy your mortgage.  

Ulster won't be accepting any new business after end of October. As to when existing customers will be effected there were no firm dates.


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## Brendan Burgess (2 Oct 2021)

skrooge said:


> AIB are allegedly going to buy your mortgage.



Hi Skrooge

I must have missed this.

Have you a link? 

Brendan


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## skrooge (2 Oct 2021)

Brendan Burgess said:


> Hi Skrooge
> 
> I must have missed this.
> 
> ...












						AIB in talks to buy Ulster Bank’s €6.5bn tracker loans
					

Sources say debt expected to be bought at discount due to low returns




					www.irishtimes.com


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## Brendan Burgess (3 Oct 2021)

Thanks for that.  Completely missed it.

I have always argued that buying the tracker book at a small discount would be a great buy. 

Brendan


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## Donaoib (3 Oct 2021)

Ok thanks.


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## Gordon Gekko (3 Oct 2021)

With interest rates where they are, it’s likely that a bank would settle a €200,000 mortgage for €210,000


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## lowspender (3 Oct 2021)

In 2010 Nationwide gave me 8% discount but it was not fixed rate.


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## skrooge (4 Oct 2021)

lowspender said:


> In 2010 Nationwide gave me 8% discount but it was not fixed rate.


No one is arguing that this didn't happen but the conditions for banks were very different back then.  Banks back then were reliant on market funding - the cost of which went through the roof. Your mortgage was costing them money. 

 INBS was such a basket case even the crazy Icelandic banks walked away from buying it. There is a very good reason that building society is no more. 

As a simple rule of thumb, based on banks current funding, if you can deposit money with your mortgage lender at a higher rate than your mortgage rate you might be able to argue for a discount. If not no chance. If your mortgage lender doesn't offer deposits then your loans probably been sold at such a discount that even at low tracker rates you're making them a healthy return. I.e., they don't need to entertain offering a discount.


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