# My five year interest only period is ending on my Ulster bank buy to let mortgage!!



## landlord (21 Dec 2012)

I received a letter yesterday from Ulster bank saying my five year period of interest only is ending on my buy to let mortgage. The letter gave me exactly 7 days notice of a 1150 Euro increase in the mortgage from Interest only to capital and interest. I am furious how can anyone expect to find €1150 extra the week before Christmas. They did apologise and said they should have given me one months notice. 
I got this mortgage through a broker and all the paperwork he originally gave me five years ago mentions nothing of a five year restriction on the interest only period. Specifically the loan offer mentions interest only but nothing about a five year interest only period. I do not have any other terms of conditions. 
I was advised by someone in Ulster bank mortgages to write in and apply for an extension to the interest only petiod. I have done this but I do not expect this letter to be looked at until after the Christmas period.  I was also advised that if I do nothing the full capital and interest repayment will come out in six days time, So he recommended I cancel my direct debit to Ulster bank and manually pay the interest only amount. ...... I hope that doesn't get me into trouble!!!

The mortgage is an ECB tracker at 0.75% above ECB. I do not want to lose this rate at any cost. 
Has anybody else gone through this with Ulster bank and have you successfully negotiated an increase in the interest only period?


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## Knuttell (21 Dec 2012)

Pretty shabby giving you such notice,if not illegal.



> I got this mortgage through a broker and all the paperwork he originally gave me five years ago mentions nothing of a five year restriction on the interest only period.



Its the paperwork you received from the Bank that you need to be scrutinizing,*The European Standardised Information Sheet * that you would have gotten when you initially drew down the loan,if there is any mention of cap & int payments it will be on this document.



> I was also advised that if I do nothing the full capital and interest repayment will come out in six days time, So he recommended I cancel my direct debit to Ulster bank and manually pay the interest only amount. ...... I hope that doesn't get me into trouble!!!



This will impact on your credit rating I would imagine and possibly give them an excuse to remove you off that Tracker rate.

If you can,pay the full amt until you get clarification,in the event they refuse you IO payments and you have documentary proof supporting your case or indeed that there is no mention of it in your loan paperwork ask for a final written letter and proceed to the Ombudsman.


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## Brendan Burgess (21 Dec 2012)

Is *The European Standardised Information Sheet *not a general information sheet of no legal consequence? 

Check your loan offer/mortgage agreement.  I would expect that you will find the 5 year clause in that. If it's not there, then you should remain on interest only.


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## wbbs (21 Dec 2012)

It will be on your loan offer letter and maybe in the specific conditions page attached to it.   As far as I know UB never did a full term interest only, buy to lets were 5yrs, home loans up to 10 yrs.


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## Knuttell (21 Dec 2012)

Brendan Burgess said:


> Is *The European Standardised Information Sheet *not a general information sheet of no legal consequence?



Correct Brendan,funnily enough though if I recall correctly I think I used this statement sheet as corroborative evidence in a case I took to the Ombudsman against ICS.



> Specifically the loan offer mentions interest only but nothing about a five year interest only period. I do not have any other terms of conditions.



However it provides an easily understandable overview of the conditions etc,the OP no longer has the terms and conditions of the loan offer but may have this somewhere around,failing that get back onto the Broker,they can be very helpful in situations like this and may have the relevant paperwork to support your case or run interference with the relevant individual in the Bank on your behalf.


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## landlord (15 Feb 2013)

I managed to get a 2 year extension on my interest only period, but this process took over 6 weeks and I ended up having to pay 2 payments of capital and interest while my request was under review to prevent any potential arrears affecting my credit rating.  I would advise anyone coming to the end of an interest only period to renegotiate an extension two months in advance.


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## Angry Kid (20 Feb 2013)

*5 year interest only clause on Ulster Bank Mortgage*

I recently experienced precisely the same experience as Landlord with Ulster Bank giving me one months notification of an increase from £200pm to £1000pm after a five year interest only period on my 25 year interest only Buy to Let mortgage. They invoked a clause which I had not been made aware of, albeit I accept that I signed the T&Cs to agree to this at the time (don't we all). It is evident that as the bank are only receiving 0.7% above base rate they are trying to recoup their money to lend to others at a higher rate. I am currently undertaking legal advice on the matter with a later fallback to the FSO should this fail. 

Has anyone dealt with the FSO? Are they a toothless tiger? My complaint, which was refused by the bank, is that I was mis-sold a product which was in effect a Capital/Repayment Mortgage cleverly disguised as an Interest Only. The illustration which they provided at the time demonstrated 25 years of interest only payments and constantly referred to Interest Only and the requirement to have a vehicle in place to repay the capital at end of term.


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## Bronte (21 Feb 2013)

Angry Kid said:


> . The illustration which they provided at the time demonstrated 25 years of interest only payments and constantly referred to Interest Only and the requirement to have a vehicle in place to repay the capital at end of term.


 
Could you copy paste this document on here please (deleting your name etc).


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## Angry Kid (21 Feb 2013)

Sorry Bronte, don't have ready access to a scanner however I have done the maths and am quite satisfied that the Mortgage Illustration provided is for Interest Only. It calculates the 25 years of interest to the penny and quite clearly highlights the need to repay the capital sum at the end of that period with no reference to any special clauses. It also refers to remembering to add on the capital sum if comparing this mortgage against a repayment mortgage! I appreciate the Illustration is precisely that however it provides a clear indication of my requirements at that time before someone slipped in a 'hidden' clause when it came to the actual Offer of Loan.


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## Anni (8 Apr 2014)

*Update!!*

Hi, I have found myself in the same situation with a hidden 5yr interest only clause that was not communicated to my solicitor. Just wondering what the outcome was?


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## 44brendan (8 Apr 2014)

Idon't understand what a "hidden" clause can be!! The loan agreement would specifically contain all relevant clauses relating to the loan repayments. If the repayments were stated as interest only for the duration of the loan with a bullet repayment at maturity then these are the terms. If not then the repayments clause should specifically state tha the IO repayments will expire 5 years from loan drawdown.


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## Anni (8 Apr 2014)

Hi, sorry I didn't explain correctly. When we sourced the mortgage, we requested an interest only mortgage. The standard mortgage offer from ulsterbank was based on an interest only mortgage for a term of 25 years. In several sections it points out that the we should make arrangements to repay the capital after 25 years e.g. A separate saving plan. I have done this through another investment property. All calculations in the standard mortgage offer document refer to the fact that the loan is interest only for 25 years. We went through the mortgage with a broker and our solicitor. The Offer Letter also makes no reference to a 5year interest only term. Ulster bank sent 2 copies of the standard mortgage offer to our solicitor. One for him and one to be signed. He talked us through it again and we signed our copy and returned it. It transpired however that there were some special conditions on the copy we signed (but not on his copy) which contained 1 sentence to say the loan was interest only for a 5year term after which it would transfer to interest and capital repayment. There is absolutely no way we would have agreed to this as we planned to pay the capital at the end of the 25year term. When I say hidden... I feel we have been midsole this product. One sentence in some special terms and conditions document changes the standard mortgage offer in its entirety plus it seems to me that this was added in a separate document At the point of the loan.


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## 44brendan (8 Apr 2014)

I'm not a solicitor but at face value this seems highly unusual and would be unlikely to stand up, provided that your solicitor can verify that the copy of the agreement held by him (still held??) is different than the one signed by you. Even if he doesn't have a copy he can surely verify his understanding of the agreement. Your first port of call should be to this solicitor. His verification must be an essential part of your claim.


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## Anni (8 Apr 2014)

I have done that and he has confirmed this is the case. He still has both copies. I also have a letter from the solicitor from the time of the purchase summarising the mortgage offer at a 25year interest only mortgage. He agrees that we have been midsole the mortgage or that there has been a failure somewhere along the line. I have contacted ulster bank and am still trying to get a response. I have been waiting for 6 weeks now so plan to visit an adviser in a branch if all else fails. I was really just wondering how AngryKid got on. The 5year clause was extremely well hidden so much so that our broker, our solicitor and ourselves missed it.


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## Anni (8 Apr 2014)

*mis-sold..... Damn autocorrect!


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## mf1 (8 Apr 2014)

"The 5year clause was extremely well hidden so much so that our broker, our solicitor and ourselves missed it."

But it was in the loan offer? So, the Bank can look for full payments? 

mf


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## Anni (8 Apr 2014)

There seems to be 2 documents. The standard loan offer which refers to the loan being interest only for 25 years throughout. And then some separate pages with separate page numbering (that don't have our mortgage reference in the header) with a bullet point saying the loan is interest only for 5 years. These additional pages are in the document we returned but not on the solicitors copy. I know it sounds bizarre but I feel we were duped. Why refer to 25 years interest only throughout the main document and the actual mortgage letter when the bank don't even have such a mortgage product. Even the monthly calculations on the offer were based on 25 years interest only and over and over it stresses that you need to have a separate saving plan in place for the end of the mortgage term. It's so misleading and I think it's a case of blatantly mis selling a product.


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## Anni (8 Apr 2014)

I'm doubtful that they will agree to interest only for the remainder of the term, but would be happy to settle for an additional 8-10 years so I can get my affairs in order. What do you think are the chances?!


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## Angry Kid (8 Apr 2014)

*Vindicated!!!*

Hi Anni, you we looking for an update?

I'm pleased to say that after outlining a very robust case to the FSO they found Ulster Bank guilty of mis-selling my mortgage and ordered them to repay the £5k in mortgage repayments that I had made since they initially switched my mortgage. A victory for the little man!!! 

It just demonstrates the need to stand up to these big companies. I also recently won a case to have a parking done rescinded. After two appeals and threatening to take me to court they finally backed down. 

Don't accept their offer, they have no case. they are very lucky that I didn't pursue a criminal prosecution for fraud as they had actually fraudulently altered the date on one of my documents. Had I pursued this someone may have ended up in jail.

Good luck and keep up the fight.


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## Anni (8 Apr 2014)

*There is hope!!*

Hi Angry Kid, that's great news. This definitely gives me hope  I'm so glad I came across this forum now. I'm going to arrange to see someone face to face as I'm getting nowhere trying to contact them in writing and online. I just find it so strange that their documents are written in this way when they haven't sold a product like that for years. Thanks again for coming back!


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## Bronte (9 Apr 2014)

Angry Kid said:


> I'm pleased to say that after outlining a very robust case to the FSO they found Ulster Bank guilty of mis-selling my mortgage and ordered them to repay the £5k in mortgage repayments that I had made since they initially switched my mortgage. .


 
When did you submit your case, when you posted here in February were you already in the system?

Well done on winning back your IO mortgage.  How did they give you back tre 5K?  By cheque?


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## Bronte (9 Apr 2014)

Anni said:


> Ulster bank sent 2 copies of the standard mortgage offer to our solicitor. One for him and one to be signed.
> 
> It transpired however that there were some special conditions on the copy we signed (but not on his copy) which contained 1 sentence to say the loan was interest only for a 5year term after which it would transfer to interest and capital repayment.


 
This is very very odd.  Normally the 2 copies should be exactly the same, and one copy is for the bank and one copy for you/solicitor.


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## Anni (9 Apr 2014)

Hi Angry Kid, just wondering do you have a FSO case number or anything that I could refer to if needs be? Don't worry if not, it was a while ago.


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## Anni (9 Apr 2014)

Hi Bronte, sorry just seeing today's posts. Yes both copies are different. The solicitor has confirmed this. There was an error made (whether intentional or not) somewhere so I'm hoping that this strengthens our argument.


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## Brendan Burgess (9 Apr 2014)

Bronte said:


> When did you submit your case, when you posted here in February were you already in the system?



He posted in February 2013!


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## Brendan Burgess (9 Apr 2014)

Angry Kid

That is really great news. It would be very helpful to many others and would motivate them to challenge Ulster Bank.

Would you start a separate thread setting out a chronological account of what happened and any advice for others. I will make it a Key Post.



In particular, if you could summarise  the following


Your arguments
Ulster Bank's responses
The Ombudsman's findings
Brendan


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## 44brendan (9 Apr 2014)

Anni, at face value this "misselling" appears to be sharp practise by UB. Given the similar experience of Angry Kid it does not appear to be a one off instance. You are fortunate that your solicitor has a copy of both loan agreements and you should now instruct him to write to the Bank on your behalf and demand that they re-instate the terms of the IO agreement for the full term of the loan (do not accept compromise if you have been misled). He should send a copy of the letter to the CEO's office re-stating his and your deep concern at the apparent sharp practise sales tactics employed by the Bank. It may be beneficial to pm Angry Kid and find out wheter his and your experience are similar. if so then there are likely to be other clients who have identical issues. 
I am all too well aware of the sharp prastice sales tactics employed by all banks during the property boom and the attempts to cover these up. It would be interesting to note how many other mortgages have been sold in this manner and whether people have caved in to the banks demand for P&I repayments, where a missale has occurred!


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## Anni (9 Apr 2014)

Thanks 44brendan. Have made an appointment to meet with solicitor. Will keep you posted of the outcome


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## Bronte (10 Apr 2014)

Brendan Burgess said:


> He posted in February 2013!


 
Yes I'm an idiot !


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## Anni (10 Apr 2014)

Hi All, Just a quick update. I had submitted an online complaint earlier in the week to follow up on the letter I sent and received a call today. They said they hadn't received the letter but spoke to me about my complaint over the phone. The lady I spoke to seemed pretty pleasant and said she would discuss the case with her team. I have just received a call to say they are happy enough to keep the mortgage as interest only for the remainder of the term. I still can't believe it. She did point out that I had to confirm my understanding that I need to pay off the capital as a lump sum at the end and asked how I intended to do that so I was happy to confirm my plans to do this through a pension scheme and another property I have. In the end I didn't have to go the legal route or through the FSO which makes me wonder - they must realise their mistake! Hope this is of help anyway to someone or gives some hope to anyone in a similar situation.


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## 44brendan (10 Apr 2014)

Excellent Anni. They have obviously realised that they are in a no win situation on this. Are they sending you out a formal letter? If not you should send them a follow-up letter quoting the verbal response and the person you spoke with and ask for a written response.


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## Kine (10 Apr 2014)

44brendan said:


> Excellent Anni. They have obviously realised that they are in a no win situation on this. Are they sending you out a formal letter? If not you should send them a follow-up letter quoting the verbal response and the person you spoke with and ask for a written response.


 
+1

Follow it up to keep a written account on your file.


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## Anni (10 Apr 2014)

Yep, she said there would be a letter sent out and she had instructed her colleagues to update our account so we'd remain Int Only when the time comes. I took her name and number as we'll just in case. Thanks again everyone for your help and advice. This really take so much pressure off!


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## Ainef (28 Jul 2014)

I'm noticing this thread now as an UB Interest Only Buy to Let Mortgage holder. The mortgage was taken out in 2007 for 35 years, I do not have the orginal mortgage documetns but I do have Letter from UB dated the month previous to drawing down the mortgage which clearly states that it is an 'Interest Only mortgage' I have now recieved an letters from UB saying that it was interest only for 2 years and should have changed back in 2009, hence I owe them €25k in arrears now, they have also switched my payments to C & I payments.
To cut a long story short, I am  not in position to afford C&I payments let alone 25k in arrears. i have contacted UB & sent in my documents and when I spoke to them last week I was advised that they had made an error since 2009 & I had to pay. The man was v nice & send a letter was sent out to me(still not recieved it) but he advised to make a formal complaint to UB.

Has anyone else been in this situation & it so wha has been theoutcome.

Cheers!


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## Squonk (5 Feb 2015)

Resurrecting the thread as it looks closest to my query. I took out a buy-to-let mortgage with Ulster Bank 10years ago. It was interest-only for the first five years but should have reverted to Capital+interest after year 5 but it never did. I kept my head down and continued to just pay interest since Ulster never contacted me.

I'm now in a situation to pay off this mortgage. The rate was Ecb+0.95%. The capital is €240k. Recently I had just being paying the interest of about €200 per month.

My question: before I unleash Ulster Bank on myself,  to pay off this mortgage will cost me €240k? Could Ulster demand arrears or anything like that? Thanks.


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## Monbretia (5 Feb 2015)

Should just be a matter of paying off the outstanding balance.   There are no arrears and if you had been making full payments the amount over the interest would have come off the capital anyway so same result result pretty much.


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## Madeline (26 Nov 2015)

Squonk said:


> Resurrecting the thread as it looks closest to my query. I took out a buy-to-let mortgage with Ulster Bank 10years ago. It was interest-only for the first five years but should have reverted to Capital+interest after year 5 but it never did. I kept my head down and continued to just pay interest since Ulster never contacted me.
> 
> I'm now in a situation to pay off this mortgage. The rate was Ecb+0.95%. The capital is €240k. Recently I had just being paying the interest of about €200 per month.
> 
> ...


Hi Squonk.
This is the first time i have posted on a forum.
I am in somewhat a similiar situation I have a mortgage over 15 years, just after noticing that it is interest only for 10 years and C&I for the last 5 years. I had thought it was interest only for the 15 years. Can i ask you when you received your statement at the end of the five year period did it state "repaymrnt method, interest only and term remaining 5 years.


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## Patsy1 (19 Aug 2016)

Squonk said:


> Resurrecting the thread as it looks closest to my query. I took out a buy-to-let mortgage with Ulster Bank 10years ago. It was interest-only for the first five years but should have reverted to Capital+interest after year 5 but it never did. I kept my head down and continued to just pay interest since Ulster never contacted me.
> 
> I'm now in a situation to pay off this mortgage. The rate was Ecb+0.95%. The capital is €240k. Recently I had just being paying the interest of about €200 per month.
> 
> My question: before I unleash Ulster Bank on myself,  to pay off this mortgage will cost me €240k? Could Ulster demand arrears or anything like that? Thanks.


Hi Squonk,
                Just wondering did you contact UB about your mortgage, I am pretty much in the same situation as yourself. I took my mortagage out in 2005 and should have reverted back to Cap + Interest at some stage. Can you please tell me how you got on? Or did you stay on Interest Only? I borrowed €175k, the house is now worth about €180k. I would sell the house now and pay UB off if it meant that there would be no penalty.  (Patsy)


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