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

[Monbretia]

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

 

[aoraki]

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!

 

[llgon]

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.

 

[wannapress1]

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 .

 

[aoraki]

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 overnight 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.

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.

 

[Monbretia]

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!

 

[FinancialQ]

Does anyone have a copy of the First Active Ts and Cs for the offset mortgage that applied in 2008. I'm interest in any part of it that relates to the availability facility and being able to move the mortgage to another property.

 

[eoghanoh]

Does anyone have a copy of the First Active Ts and Cs for the offset mortgage that applied in 2008. I'm interest in any part of it that relates to the availability facility and being able to move the mortgage to another property.

I've seen a lot of people asking for this over the years. A while ago, for myself, I did a bit of digging and found a digital copy of it so happy to share those links here....
Here is a link to a digital version of the document in the Internet Archive:
https://web.archive.org/web/2007111...loads/Offset_Banking_Terms_and_Conditions.pdf
And here is a link to the webpage containing the link (click on the Offset Flexible Mortgage Terms and Conditions at the top of the page to get to the document I just linked to):
https://web.archive.org/web/20071021075231/http://firstactive.ie:80/mortgages/offset_flexible/terms_and_conditions/index.aspx
The Internet Archive has multiple copies of the First Active site indexed at different times so if the above doesn't give you what you need then you can check other versions here:
https://web.archive.org/web/20070501000000*/firstactive.ie
I've attached a copy of it here in case it disappears. The information at the bottom of the 3rd last page says the information is correct at time of going to print 25/10/06. If there was a later version it would likely be archived, so I think that's the latest.

Also note that you need to read the booklet in conjunction with your signed Letter of Offer as that is what is legally agreed between you and First Active. You can request yours from the bank as your solicitor is unlikely to have it anymore. I requested mine from Ulster Bank a few months ago and they posted out a copy of it very quickly, only took a week or two. I thought it would be useful to have it to hand so I can see where I stand when they eventually do something with this mortgage to make sure I retain my rights etc. I would advise any holders of this type of mortgage to do the same...

Regarding your specific questions surrounding the facility and being able to move the mortgage: I'm (obviously!) not willing to post a copy of my mortgage Letter of Offer here, but I will tell you that it specifically says you can move the mortgage. The first point of section 1 in the details section says this forms part of your loan offer. And the last point of section 9 says you can keep the mortgage if you move house. And it also contains information in multiple places regarding the facility arrangement so I think the best course of action is for you to get the original Letter Of Offer and then together with the Terms and Conditions booklet attached here you will have everything.

Hope that helps.

 

[FinancialQ]

That is absolutely fabulous, I can't thank you enough. I have spent over two years trying to find that copy. UB said they didn't have it. Was the one they gave you dated 2005 or later?.

 

[eoghanoh]

That is absolutely fabulous, I can't thank you enough. I have spent over two years trying to find that copy. UB said they didn't have it. Was the one they gave you dated 2005 or later?.

You're welcome, I'm glad it helps. As I mentioned earlier, the date on this one, as shown in the footer at the bottom of the 3rd last page (page 25), is 25/10/06. Screenshot attached (with my highlighting added). To be clear, Ulster Bank didn't supply this directly to me, I found it on the Way Back Machine which I have linked to in my previous post.

I've also attached some scanned snippets of the Letter of Offer which do not have any personal information in them. The first snippet just shows the header so you have contact details (although I'm sure you have these already) and you can see the title of the document. The other 2 snippets (I've added highlighting) show section 1, which says it is part of the mortgage offer (remember, this is the contract you signed with the bank, you would have signed it at your solicitor's office) and section 9 which says you can keep the mortgage if you move house.

Again, hope it helps. There's going to be a lot of people with a lot of questions about these mortgages over the next while, I recommend that people ask the bank for their signed Letter of Offer now as it may become very difficult to get it later depending on what the plan for these mortgages turns out to be...

 

[FinancialQ]

That's perfect, that's exactly what I have, so now I have everything. Thanks again for your help.

 

[fliball123]

You're welcome, I'm glad it helps. As I mentioned earlier, the date on this one, as shown in the footer at the bottom of the 3rd last page (page 25), is 25/10/06. Screenshot attached (with my highlighting added). To be clear, Ulster Bank didn't supply this directly to me, I found it on the Way Back Machine which I have linked to in my previous post.

I've also attached some scanned snippets of the Letter of Offer which do not have any personal information in them. The first snippet just shows the header so you have contact details (although I'm sure you have these already) and you can see the title of the document. The other 2 snippets (I've added highlighting) show section 1, which says it is part of the mortgage offer (remember, this is the contract you signed with the bank, you would have signed it at your solicitor's office) and section 9 which says you can keep the mortgage if you move house.

Again, hope it helps. There's going to be a lot of people with a lot of questions about these mortgages over the next while, I recommend that people ask the bank for their signed Letter of Offer now as it may become very difficult to get it later depending on what the plan for these mortgages turns out to be...