# Ulster Bank  cuts  mortgage rate  to 2.3% fixed for two years - all LTVs



## Brendan Burgess (29 Jun 2018)

In addition to these new rates, Ulster Bank is also offering customers:

·        €1,500 contribution to legal fees.

·        Free valuations.

·        Same rates available to new and existing customers.

·        10% annual overpayment allowance on fixed rate products, giving customers both certainty of repayment and flexibility to make large overpayments to save interest.


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## Brendan Burgess (29 Jun 2018)

For people borrowing up to 90% LTV, these are huge cuts. 

The lowest rate currently from any provider is 2.85% fixed for 4 years from Ulster Bank, so that is a cut of .55%. 

It's particularly good news for existing Ulster Bank customers.  An UB customer who is in negative equity or arrears who can't switch to another lender can cut their rate to 2.3% for the next two years. 

It's also a good cut for those on less than 80% LTV.

The cheapest rate is also from UB at 2.6% fixed for 4 years. 

Brendan


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## Brendan Burgess (29 Jun 2018)

What is particularly satisfying for the Fair Mortgage Rates Campaign is that these rates are offered to existing customers as well. It shows what lenders can offer if they compete on mortgage rates alone.  Other banks give cash back to attract new customers which leave their existing customers stuck on artificially high rates. 

Brendan


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## RedOnion (29 Jun 2018)

They're huge cuts, far bigger than I thought we'd see anywhere this year. and good to see they've followed BOI and EBS in offering them to all LTV bands. There is absolutely no reason for a customer to be on SVR any longer.

This will put pressure on BOI to react if they want to protect their market share.

The market has quietly got very competitive. The BPFI statistics on mortgage approvals for May were interesting. Year-on-year the 'remortgage' approvals were up over 100%. This contains switchers and equity release. I don't have details but I imagine there is a higher probability of these leading to drawdown than a FTB approval, so we will see higher switcher numbers this year (just over 3,000 switched mortgage in 2017).


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## Sarenco (29 Jun 2018)

Wow! 

2-year fixed @2.3%, accross all LTVs, with €1,500 cashback and a free valuation - that's a fantastic deal by any standards.

That has to put pressure on other lenders to react - AIB's mortgage products now look very expensive in comparison.


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## misemoi (29 Jun 2018)

And I'm off to switch to UB!  I had been interested in the four year fixed but it wasn't as attractive at the rate we are hoping to overpay but this 2.30% rate is excellent.  Now to get a discount on the legal fees as this is our third switch!


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## Lightning (29 Jun 2018)

Hopefully we will see competitor price reactions over the coming weeks.  

Charlie Weston has an article in then Indo on the rate changes .


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## New2This (29 Jun 2018)

Have been talking with Ulster about the 4 year but wasn't sure, but this new 2 year rate is a winner in my opinion


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## Miakk (29 Jun 2018)

@Brendan Burgess, any change in the BTL rates? 

Reluctant landlord here stuck at UB SVR of 4.3% (unless I get some good news about my tracker case), but also barely out of negative equity so no way I can switch as >70% LTV still outstanding on the mortgage balance


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## Sybil35 (29 Jun 2018)

Can anyone confirm that they really mean 10% overpayment on outstanding balance? as in 300k mortgage and you can overpay by 30k per year charge free? can it be installments or lump sum?


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## RedOnion (29 Jun 2018)

Sybil35 said:


> Can anyone confirm that they really mean 10% overpayment on outstanding balance? as in 300k mortgage and you can overpay by 30k per year charge free? can it be installments or lump sum?


Hi, yes their t&c's allow for 10% of the balance at the start of that year (so in your example 30k in year 1, 27k in year 2, etc). Either lump sum or regular payment are allowed.


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## Sybil35 (29 Jun 2018)

That's great RedOnion. Also is there a minimum term you need to be with your current bank before you can switch? Still hoping to get a quick switch into EBS for the cash bank and then Ulster.


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## RedOnion (29 Jun 2018)

I'm not entirely sure about minimum term. They had talked about accepting switchers after just 6 months, but I don't know if that was with current lender, or in total. There are some posts in the switchers forum from people who seemed to have managed it.


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## RedOnion (29 Jun 2018)

@Brendan Burgess 
It's interesting to look at the rate movements across lenders since Q1 2017.

In that period, AIB is the only lender to have reduced SVR! Butwe've seen cuts of up to 0.9% on fixed rates (PTSB 5 year) as well as the introduction of new products such as this 2 year from UB.

It's interesting to read the SVR policy statement from each bank in that context...

Some interesting comments from Goodbody, including the impact on bottom line for each bank for a 25bps drop in rates: [broken link removed]


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## HollowKnight (29 Jun 2018)

Long time lurker, first time poster. 

About to switch to UB and now can't decide between the 2.3% for 2 years or the 2.6% for 4 years. 

In the first two years, the 2.6% would cost approx €1200 more. But it's difficult to know what rate UB (or other banks) will be offering in 2 years.


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## tonymac (29 Jun 2018)

Sounds too good to be true but if so it might finally move things in just the way this campaign has looked for, not at the euro average but for lots of people a huge reduction and a chance to force the dasterdly banks to finally compete properly. It might shake them but the other thing that needs to happen is switching and lots of it. I'll be on to mine on monday morning.


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## Sarenco (29 Jun 2018)

tonymac said:


> It might shake them but the other thing that needs to happen is switching and lots of it.


Couldn't agree more Tony - customer inertia is a banker's best friend.


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## MsCutha (30 Jun 2018)

Possibly a daft question but this is all new to. We’ve recently been approved by UB for mortgage and we were looking at fixing for 5 years at 2.9 (LTI 3.8). Can we change our minds and go with this 2.3% for 2 years? We haven’t received or signed any documents.


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## skrooge (30 Jun 2018)

MsCutha said:


> Possibly a daft question but this is all new to. We’ve recently been approved by UB for mortgage and we were looking at fixing for 5 years at 2.9 (LTI 3.8). Can we change our minds and go with this 2.3% for 2 years? We haven’t received or signed any documents.



Yes, you can change. Mortgage approval should not be dependent on choice of variable/fixed rate. After drawdown you should have a cooling off period.


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## mugsymugsy (30 Jun 2018)

Whilst I think it is great news and puts pressure on others - (i believe that ptsb are reducing fixed rates). However I think people should should consider what will happen after two years is up. Where will rates be then? 

I'm not a crystal ball expert as we decided to fix a few months ago withwi 10 year at 2.99% with KBC due to our personal circumstances and are natural risk aversion.


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## Brendan Burgess (30 Jun 2018)

mugsymugsy said:


> However I think people should should consider what will happen after two years is up. Where will rates be then?



Hi mugsy 

Not sure that this is a very relevant issue. If you think that they might be a lot higher, then fix for 4 years at 2.6% 

If you think that they might fall in the meantime, then fix for two years and if rates fall, break out early and avail of the lower rate. 

There is a small risk that after two years, Ulster Bank's rates will be higher than everyone other bank's rates *and *that you will be unable to switch. But that is a risk with any lender. 

Brendan


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## Hammo16 (30 Jun 2018)

Brendan Burgess said:


> There is a small risk that after two years, Ulster Bank's rates will be higher than everyone other bank's rates *and *that you will be unable to switch. But that is a risk with any lender.
> 
> Brendan



Hi Brendan.

When you say that you may not be able to switch in two years, what may stop you from switching or are you simply referring to the personal financial circumstances that might prevent you getting approved by another lender?

Delighted to hear of these new reduced rates, about time lenders in this country gave more reasonable rates comparable to other EU countries. I am a soon to be FTB (hopefully) so would love to see some other lenders follow suit. Would you expect to see many other lenders cut rates to a similar degree?


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## Brendan Burgess (30 Jun 2018)

Hammo16 said:


> When you say that you may not be able to switch in two years



If you have changed jobs within the past 12 months
If your income has dropped 
If you have been in arrears 
if you have rescheduled your mortgage 
If lending criteria have changed and you no longer qualify 
If the mortgage market freezes up again


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## cpt_boom (30 Jun 2018)

MsCutha said:


> .. We’ve recently been approved by UB for mortgage and we were looking at fixing for 5 years at 2.9 (LTI 3.8). Can we change our minds and go with this 2.3% for 2 years? We haven’t received or signed any documents.



The 2 and 4 year rates aren't available to customers getting exceptions, so your LTI would need to be <3.5. The 5 year might be your best bet.


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## bonzos (30 Jun 2018)

I'm litterly days away from signing the paperwork on switching to BOI 10 year at 3.2%....but getting cold feet now as I'm eligible for UB 7 year at 2.99%.


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## Scoops (1 Jul 2018)

BOI 10 year fixed at 3.2 is this a special deal as its advertised at 3.3?


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## skrooge (1 Jul 2018)

bonzos said:


> I'm litterly days away from signing the paperwork on switching to BOI 10 year at 3.2%....but getting cold feet now as I'm eligible for UB 7 year at 2.99%.



It isn't clear cut. For BOI you've the benefit of a longer term (this may or may not turn out to be a cash benefit but there is the peace of mind) and 3% cashback. For UB it's the 0 cost change (I'm assuming you're already with them) and a slightly lower rate. Just looking at thet first 7 years of both mortgages it's only worth switching for mortgage sums over approx €152k. At that point the 3% cashback trumps the cost of switching (Assume switching fees of 1500) and the marginally higher interest rate costs.

Of course the waters get muddier if you are able to overpay. BOI will let you overpay by an additional 10% of your monthly repayments whereas UB will let you overpay by 10% of the balance per year.


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## MsCutha (1 Jul 2018)

Thanks, I read about it in their website. Ah well we’ll stick with the 5 year fixed rate.


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## bonzos (1 Jul 2018)

skrooge said:


> It isn't clear cut. For BOI you've the benefit of a longer term (this may or may not turn out to be a cash benefit but there is the peace of mind) and 3% cashback. For UB it's the 0 cost change (I'm assuming you're already with them) and a slightly lower rate. Just looking at thet first 7 years of both mortgages it's only worth switching for mortgage sums over approx €152k. At that point the 3% cashback trumps the cost of switching (Assume switching fees of 1500) and the marginally higher interest rate costs.
> 
> Of course the waters get muddier if you are able to overpay. BOI will let you overpay by an additional 10% of your monthly repayments whereas UB will let you overpay by 10% of the balance per year.



Thanks for the reply, I created an excel with all the figures  (including cashback) and there is very little to separate all the banks hovering around the 3%. BOI however do edge it with the 3% cashback, but you have to wait 5 years for the final 1%.....only2% up front


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## TheJackal (2 Jul 2018)

RedOnion said:


> @Brendan Burgess
> It's interesting to look at the rate movements across lenders since Q1 2017.
> 
> In that period, AIB is the only lender to have reduced SVR! Butwe've seen cuts of up to 0.9% on fixed rates (PTSB 5 year) as well as the introduction of new products such as this 2 year from UB.
> ...



Why have no banks reacted to AIB dropping their variable last year to 2.75!


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## RedOnion (2 Jul 2018)

TheJackal said:


> Why have no banks reacted to AIB dropping their variable last year to 2.75!


Because it'd become a race to the bottom? They've managed to hold or grow market share (with exception of UB), so what they're doing is working.
Look at the lenders, and their products. AIB has over 30% market share. They have most competitive variable rates, but unattractive fixed rates. BOI have 27% share. Very competitive fixed, but the most unattractive variable. 
Until EBS matched BOI rates, there was nobody directly comparable to BOI as they've all got different cashback offers. 
The other lenders are cherry picking specific terms / balances to avoid taking on BOI directly, and they all rely on broker channels for about 40% of their business.
There's increased competition, but there's still a bit of a dance going on.


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## skrooge (2 Jul 2018)

TheJackal said:


> Why have no banks reacted to AIB dropping their variable last year to 2.75!



As an UB customer I'd be pretty happy with what's on offer.

If I were to take out an UB mortgage and fix 37.5% for 2 years and leave the rest variable -  assuming a low LTV - I would match AIB. Ok not strictly variable but I'd be able to repay over 66% of loan without having to worry about break fees but also have partially insulated myself against future rate increases. 

I'm interested to see what KBC do (if anything). I would have considered UB and them to have had the best middle of the ground packages but between UB rate drops and flexible overpayment options it doesn't leave much for KBC. Probably only the 10 year fixed product that stands out for me now.


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## Webster (2 Jul 2018)

Great rate, moving in the right direction and a market leader. Ulster bank must believe mortgage interest rates are going to stay on the floor for the next two years.


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## HollowKnight (2 Jul 2018)

Webster said:


> Great rate, moving in the right direction and a market leader. Ulster bank must believe mortgage interest rates are going to stay on the floor for the next two years.


Hopefully so! Can't believe PTSB's pathetic response!


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## candyman (2 Jul 2018)

great rate from UB at 2.3%.
asides from the rate offer, would anyone have any reservations about moving a mortgage to them after all the payment blunders they made in the last year or so ? Would you trust them to manage your mortgage properly?


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## newirishman (3 Jul 2018)

candyman said:


> great rate from UB at 2.3%.
> asides from the rate offer, would anyone have any reservations about moving a mortgage to them after all the payment blunders they made in the last year or so ? Would you trust them to manage your mortgage properly?


No and yes.


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## misemoi (3 Jul 2018)

I asked the same question about the reliability of UB on another thread. I'd be concerned they were trying to bulk.up their customer base in view of selling or being acquired. But I'm happy to keep an eye on our contracts and mortgage balance (as I currently do anyway) and benefit from the low rates .


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## Sarenco (3 Jul 2018)

"_The Ulster Bank move will probably put the most pressure on AIB to act given its less competitive fixed-rate product suite and erosion of market value seen in the second half of last year".

https://www.independent.ie/business...sb-is-latest-to-cut-fixed-rates-37065847.html
_
IMO a move from AIB on its mortgage rates is way overdue - they are now very poor value.  

Will the Ulster Bank finally prompt AIB to act?  Let's hope so.


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## apeking (3 Jul 2018)

I am 20 months into a 3 years fixed rate of 3.65% with Ulster Bank.

I have called them to see what the break fee would be and for them to tell me what rates I can switch to. They said they will send me out two separate letters, one advising of the break fee and the second on the rates I can change to.

Will let you know how I get on.


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## skrooge (3 Jul 2018)

misemoi said:


> I'd be concerned they were trying to bulk.up their customer base in view of selling or being acquired .



Loan book acquisition would only be a negative if you were in arrears and the purchaser was a so called vulture fund looking to turn a quick buck. But given we're talking about being in a position to refinance here I don't see any concern for a borrower if you're with UB. Pay bills on time and who cares if the headed paper the statement comes on changes.  Regardless I would expect everyone to be looking at best options when any fixed rate expires (if not before)


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## phantom60 (5 Jul 2018)

Brendan Burgess said:


> It's particularly good news for existing Ulster Bank customers.  An UB customer who is in negative equity or arrears who can't switch to another lender can cut their rate to 2.3% for the next two years.
> 
> Brendan



Are you sure that UB customers in negative equity can avail of this ?
This is from their website - looks like UB customers over 80% LTV can't avail of this ?
Or am I misunderstanding something ?


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## RedOnion (5 Jul 2018)

@phantom60 
Here's their press release which clarifies
https://digital.ulsterbank.ie/content/dam/Ulster/CorporateAffairs/MediaRI/FixedRate29Jun18.pdf

The website seems to focus on new customers. It's available for all LTVs in those cases, so long as an exemption is not being sought.


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## Brendan Burgess (5 Jul 2018)

Agree with Red. 

From the press release: 

*"EMBARGO 00.01 29th June 2018 *Ulster Bank has announced a brand new two year fixed rate mortgage of 2.3%, the lowest in Ireland. The new rate is available across all Loan to Value bands and is in addition to the market leading four year fixed rate of 2.6%. The four year rate is also now available across all LTV bands (previously only available for up to 80% LTV), making Ulster Bank home to the cheapest fixed rate mortgages in the country."


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## phantom60 (5 Jul 2018)

Thanks RedOnion & Brendan.

I guess the only way to be 100% sure is to contact them as I'll be jumping on it if it's available to me.
I'll let you know how I get on.


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## apeking (6 Jul 2018)

I got a letter today from UB confirming the rates I can move to, here is the terms for the 2 year 2.3% rate:

_Fixed until 30/09/20 reverting to Standard Variable Rate <90% LTV (APRC 3.9%)

This rate is only available if your LTV is no more than 90%, Customer not seeking an exception to CBI maximum lending rules under SI568_


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## Brendan Burgess (6 Jul 2018)

apeking

Are you a new customer or an existing customer?


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## Eoghan (6 Jul 2018)

I got a letter stating 1200 euro to break with 6 months left.


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## apeking (6 Jul 2018)

Exisiting customer, currently 18mths into  a 3 year fixed rate


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## Ariel7 (9 Jul 2018)

We fixed with Ulster for 3 yrs @ 3.65 in March 2017. I contacted them after reading about the new rates on this forum.
Our breakage fee has been quoted as 800 EUR. We will be saving 260/month for the next 19 months on the 2.3 rate  (which we have been offered and we are 90% LTV) so it's well worth it. Thanks to everyone on this site for providing so much helpful information.


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## apeking (9 Jul 2018)

Ariel7 said:


> We fixed with Ulster for 3 yrs @ 3.65 in March 2017. I contacted them after reading about the new rates on this forum.
> Our breakage fee has been quoted as 800 EUR. We will be saving 260/month for the next 19 months on the 2.3 rate  (which we have been offered and we are 90% LTV) so it's well worth it. Thanks to everyone on this site for providing so much helpful information.



Good to hear! How long did it take for them to send out the break letter? They sent me the rates letter last week but haven't receive the break fee letter.


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## Brendan Burgess (9 Jul 2018)

apeking said:


> Exisiting customer, currently 18mths into a 3 year fixed rate



If you are over 90% and are refused the 2.3% rate, send them a copy of the press release. 

Brendan


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## Ariel7 (9 Jul 2018)

apeking said:


> Good to hear! How long did it take for them to send out the break letter? They sent me the rates letter last week but haven't receive the break fee letter.


We received the rates letter last Thursday and the breakage fee letter today.


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## apeking (9 Jul 2018)

Thanks, got the fee over the phone from them today, €420 - will save about 240 a month for next 15 months if I switch to 2.3%

Thanks all


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## Eoghan (9 Jul 2018)

What does the breakage fee letter look like? I'm not sure if I got this. I think I just got the rates letter. It's been a week and I haven't got it yet. Do I need to ring them to get the actual breakage fee?


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## RedOnion (9 Jul 2018)

Eoghan said:


> Do I need to ring them to get the actual breakage fee?


That's quickest. The break fee you got on new rate options is the max they can charge you if you break (6 months interest)


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## Eoghan (10 Jul 2018)

Thanks redonion. Rang them there. Turns out it's only 170 euro. Went ahead with that.


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## Sybil35 (16 Jul 2018)

I spoke with Ulster and to switch over to them they stated I needed to be with my current lender for 6 months. Has anyone been told this?


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## skrooge (16 Jul 2018)

Sybil35 said:


> I spoke with Ulster and to switch over to them they stated I needed to be with my current lender for 6 months. Has anyone been told this?



Was the case for me and have also heard it from others on here


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## cliqueentour (17 Jul 2018)

How long must you be with your current lender to switch to BOI? And how long before switching to EBS also please?


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## Bronte (17 Jul 2018)

Great to hear so many people switching.  That creates pressure on the banks to go lower.


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## Blackrock1 (17 Jul 2018)

skrooge said:


> Was the case for me and have also heard it from others on here



wasnt the case for me, but it went through private banking, if the mortgage is over 500k go down that route.


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## misemoi (17 Jul 2018)

I only switched to AIB back in April but I'm going to make an appointment anyway and plead my case. I have statements showing continuous payments so hoping that will help.


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## Sybil35 (17 Jul 2018)

I had no issues switching from AIB to BOI. I am going to switch to EBS now and apply to Ulster at the same time and switch over after 6 months.


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## rameire (18 Jul 2018)

I applied for the 2.3%
I am with UB on a new mortgage less than 6 months.
I also had an exception for a second time buyer to increase the lending to 90%
and I got the new rate. no problems.
All sorted and done and confirmation letter received.


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## rameire (18 Jul 2018)

just had a quick look at the sheet I sent back. ( copy ) the 2 yr fixed rate until 30/09/20 at 2.3%.

The rate that is directly below it is a 3 yr fixed at 2.8% until 30/09/21.

id give them a quick call and just ask, what is the rate that is now on your account.


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## phantom60 (2 Aug 2018)

phantom60 said:


> Thanks RedOnion & Brendan.
> 
> I guess the only way to be 100% sure is to contact them as I'll be jumping on it if it's available to me.
> I'll let you know how I get on.



Eventually got around to ringing UB today and they quoted me the rates as per the press release.
Just waiting now for the letter to arrive in the post.
Thanks again.


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## Eoghan (2 Aug 2018)

Can anyone tell me what happens after you send the rate change documents and pay the fee? I did all this on the 10th of July and I've received nothing back confirming the change. I'm asking because I want to overpay another 10%.


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## rob oyle (3 Aug 2018)

Bronte said:


> Great to hear so many people switching.  That creates pressure on the banks to go lower.


This is the key point... banks react to mass movements and profit off inertia.


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## Ariel7 (4 Aug 2018)

QUOTE="Eoghan, post: 1577834, member: 100565"]Can anyone tell me what happens after you send the rate change documents and pay the fee? I did all this on the 10th of July and I've received nothing back confirming the change. I'm asking because I want to overpay another 10%.[/QUOTE]


We paid the fee over the phone and posted back rates form on the same day. We then received a letter 2 weeks later telling us that the change had been made. It also says that if the period between the receipt of form and the next mortgage payment date is less than 14 days then the new rate doesn't take effect til the following month.


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## Eoghan (4 Aug 2018)

[QUOTE="We paid the fee over the phone and posted back rates form on the same day. We then received a letter 2 weeks later telling us that the change had been made. It also says that if the period between the receipt of form and the next mortgage payment date is less than 14 days then the new rate doesn't take effect til the following month.[/QUOTE]

Thanks Ariel 7. I did the same, paid and sent the same day. So I was right in thinking it was taking too long. I rang them up to find out what was going on so hopefully I get something next week.


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## pclarkeo (8 Aug 2018)

Hi, I have question on this...

Given that BOI has a Fixed Rate of 3% plus 3% cashback, would that be the best option if I was switching to a fixed from AIB Variable?

Say I have a 400k mortgage for 29 years...(dont think LTV matters with either BOI or UB in this example) and I am looking for a 2 year fixed...

For:
UB @ 2.3% the repayments would be 1576 monthly
BOI @ 3% the repayments would be 1722 monthly

So thats a saving of 3504 with UB over BOI over 2 years. Then you have the 1500 with UB for legal fees, so lets say thats 5004 saving over BOI.
But with BOI you get the 2% cashback on drawdown which is 8000. So thats 3k up on UB over 2 years (and another 1% cashback after 5 years but lets not include that)

Am I calculating this correctly? Should anything else be taken into account when choosing between these 2 (or any other provider)


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## pauric (8 Aug 2018)

Check what will be owed on the mortgage after the 2 years? The lower rate should have reduced the principle by a further 2k than the higher rate.


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## Brendan Burgess (8 Aug 2018)

pclarkeo said:


> Am I calculating this correctly?



No. You should look only at the interest charged less the cash back. Any calculation based on repayments will be misleading for the reason pauric has pointed out.

Brendan


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## pclarkeo (8 Aug 2018)

Brendan Burgess said:


> No. You should look only at the interest charged less the cash back. Any calculation based on repayments will be misleading for the reason pauric has pointed out.
> 
> Brendan



ok thanks, I'll look into that.


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## renter45 (8 Aug 2018)

Sybil35 said:


> I had no issues switching from AIB to BOI. I am going to switch to EBS now and apply to Ulster at the same time and switch over after 6 months.


Any update on how this is going?


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