# Ulster Bank changes terms for people who want to port their tracker to a new home



## Brendan Burgess (3 Feb 2014)

I spoke to UB this morning and they told me that they had changed the terms on this mortgage product a month ago.

The Ulster Bank  [broken link removed]is a little confusing because they want to make sure that the customer can't claim that they did not know that they were losing their tracker. 



> If you are an Existing Tracker customer this rate cannot be moved  to your new home. However you can choose a new 5 year Tracker rate (on  ECB *  linked rate plus a margin) for loan amounts upto your current  level of Tracker borrowings (see rates tab). This new rate will depend  on your existing Tracker rate and your new LTV. The remaining balance  (if required) will be based on one of our Fixed/Variable rate options.   After the initial 5 year period, the rate reverts to the Banks Standard  Variable Rate (currently 4.50% (APR of 4.6%**)) unless an alternative  rate is chosen.
> 
> 
> 
> *                                 If you are on a Tracker Rate and you wish to move home using a  Home Mover Mortgage, you will lose your right to your Tracker Rate for  the lifetime of your mortgage. You will have a new mortgage agreement  and your monthly repayments, your total amount repayable, and the  interest rate on your mortgage may be higher than under your previous  mortgage.                             *


While this appears inconsistent, this is what it means.

The bit in bold is very clear so that no one can complain later that they did not realise that they were losing their right to a tracker. 

The first bit says that while you can't move your existing rate, you can take out a new rate for the first 5 years. 

Here is their example, which I have amended to put in rates



> Current home worth €120,000 with an outstanding Tracker mortgage of  €200,000. Negative equity is therefore €80,000. Existing LTV is 167%.
> 
> _BB: Say existing tracker is ECB + 1% ( i.e. 1.25%) _
> 
> ...


My summary 



 |before|after 
Home value|€120,000| €300,000 
Tracker mortgage| €200,000|€200,000 
SVR mortgage|0|€180,000
Total mortgage|€200,000|€380,000
Negative equity|€80,000|€80,000
LTV|166%|127%
Interest rate on tracker element|1.25%|2.75%
Additional interest on tracker element|-|€3,000
Additional interest on tracker element {br} after 5 years||c.€6,000


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## Brendan Burgess (3 Feb 2014)

Is this a fair deal?

Obviously it's not as good as the deal they were doing, when they allowed you retain your tracker for the full period. 

I was very surpised at the time of the generosity of their deal. It is in the lender's  interest to wean people off trackers. Most of the other banks are hoping that with the pick up in the economy and the pick up in house prices, people will be "forced" to trade up and will give up their tracker. 

It's somewhat similar to Bank of Ireland's deal.      BoI increases the margin by a specified amount of 1.3% for 5 years. 

It's a lot better than no deal at all, which is what the fully state owned banks - AIB/EBS and ptsb offer. 

The rate increases by an average of about 1.5% for 5 years. So this will cost you in interest, around €3,000 for the average loan of €200,000.

After the 5 years, the rate increases to about 4.75% SVR , so that is an increase of about 3% for most people. 

But after 5 years on a tracker, you will have paid down a fair lump of your capital, so you won't notice it as much.


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## Brendan Burgess (6 Feb 2014)

Covered in today's Indo 

Ulster Bank hits tracker borrowers who want to move house


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## damoz (11 Feb 2014)

*Ub*

Co-incedentially i was in UB today enquiring about my options. My PPR is approx 80k in negative equity. I am looking at my options. I was told in branch that if i rent out my PPR now, and take a loan with another bank, i will NOT lose my tracker. (was surprised, and would need to get that in writing). However, if i rented out and applied for mortgage with them i would lose the tracker (becomes an investment rate - 5.6%). Seems odd. Almost like they are encouraging to look the new mortgage else where !

I should add, the option to sell and carry the negative equity is as Brendan outlined. I am swaying more to the option of renting, paying the difference, keeping the tracker, and applying for a 2nd mortgage elsewhere.


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## stwom (13 May 2014)

Damoz, can you let me now what happened with your rent/new mortgage? Did they allow you to keep the tracker?

Shane


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## peteb (16 May 2014)

Lily1234 said:


> I want to port a jointed mortgage into my sole name (divorced) but Ulster bank said that I have to take out a new mortgage. This means I will lose my tracker and I will have to increase my term. Are they able to take me off the tracker when I have never missed a repayment?



You aren't looking to port a mortgage.  That is a different kettle of fish.


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## Brendan Burgess (27 Jun 2014)

Table of examples for increase in UB tracker rates 

I have used the most common scenarios, to work out what the typical increases would be



 New LTV|Existing margin|New marginfor 1st 5 years
up to 90%|0.8%|2.%
90% - 140%|0.8%|2.25%
up to 90%|1%|2.25%
90% - 140%|1%|2.5%
up to 90%|1.5%|2.5%
90% - 140%|1.5%|2.75%


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