Key Post I have an Ulster Bank tracker – should I consider fixing?

@JulesC

I don't think you should be looking at switching to another lender.

Your mortgage will be taken over by AIB who treats its existing customers fairly, so no need to switch.

It will take some time for your mortgage to be taken over by AIB. By that time, fixed rates will probably have increased, so you should either stay on a tracker or fix now with Ulster Bank.

JulesC said:
Requested a call back from Ulster Bank to discuss fixed rate options.
Click to expand...

There is no need to ask them for your options.

You can find them here:

Mortgage Rates | Fixed, Variable, Buy-To-Let | Ulster Bank

Ulster Bank Ireland DAC is no longer accepting any new application requests from personal customers. There are some exceptions to this for existing customers, visit our website for further information.
www.ulsterbank.ie

Ulster Bank is having great difficulty returning calls, so if you decide to fix, then you should just write to them telling them to fix your rate. If you get the forms in time and return them in time, fine. But no need to wait.

€97,000 over 16 years at 2.4% should be about €600 a month.
ECB rates will probably rise above 2% so assume a tracker rate for you of 3.5%.
You can fix for 5 years at 2.35%, so you probably should do so although you will lose your tracker when the fixed rate ends.

If you leave the term fixed at 16 years, you could face early repayment penalties.


€97,000 @2.35% over 9 years would be €970 per month, which seems to be the level you are paying.

So, if you are sure that you can pay €970 per month, then
1) Fix at 2.35% for 5 years
2) Reduce the term to 9 years.

At the end of the fixed rate period, your balance will be down to €46,000 so even if the rate at that stage is higher than you would have paid had you remained on your tracker, it won't cost you that much.
 
From a tracker it is not possible to do this online. It gives the following message.

You are not eligible to switch online at this point​

You are only eligible to switch online if:
  • You are within 60 days of your existing fixed rate product ending or are on one of our variable rates
  • You have 5 or less sub accounts to your mortgage
  • You are not on a Base Rate Tracker mortgage
For further assistance please contact us on: 01 709 2500 or 1890 252270. Lines are open: Mon to Fri 9am-5pm (excl. bank holidays). Calls may be recorded.
 
If you are eligible, you will get a list of available rates. You can select one and submit.
You should the get the confirmation in the post. But I’d still call them after a few days to ensure everything is fine.
 
Thanks for that.

So anyone who does wish to fix from a tracker should take a screen shot of that.
They should call the phone number and make a note of the time and the day and the response they get.
They should take a screenshot of the rates on offer.
They should send a letter by registered post to Ulster Bank saying
"I called you on
I could not get through.
I wish to avail of the following rate fixed until 31 December 2027


I understand that I will not be able to return to my tracker rate at the end of the fixed rate period.

Yours faithfully
 
Many thanks for the above advice Brendan really appreciate it. I only came across this forum during the week and so glad I did!

Just one more question,I do have the potential to pay a lump sum of €20,000 off my tracker from savings/investments immediately - should I do this before the latest rate hike of .75% takes effect on the 21st October & rate moves up from 1.65% to 2.4%? Sorry if this seems a stupid question and no-brainer! I have being trying to research & see what is the best thing to do for me - I may be over-thinking & complicating things!

In relation to requesting a fixed rate - I can’t apply online on manage my mortgage login but they have supplied the following information re contacting them if you are considering fixing.
I will be following up immediately & requesting the 2.35% rate for 5 years fixed rate as per advice you have given.

I can’t Thank You enough for your valuable advice.
Many thanks,
Julie
 

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JulesC said:
,I do have the potential to pay a lump sum of €20,000 off my tracker from savings/investments immediately - should I do this before the latest rate hike of .75% takes effect on the 21st October & rate moves up from 1.65% to 2.4%?
Click to expand...

@JulesC

The exact timing doesn't matter much as long as you pay it off before you switch to a fixed rate.
Tell them to reduce the term to 7 years or 8 years.

€77k @ 2.35% over 7 years will cost you €995 per month. 8 years would be €880.

Brendan
 
Thanks Brendan appreciate all your help!
 
Hi Brendan,
Would love to get your opinion on this. I have been inclined to wait it out and stick to the tracker as I have such a long term left but as others have mentioned the media scaremongering doesnt help.

1) Existing tracker margin. ECB + 1.15%
2) Amount outstanding on your mortgage €181429
4) Remaining term 24 years 4 months
5) Lender - Ulster Bank
6) Value of your home - €300000
7) Overpayment? (been overpaying €250 per month for few years. Apparently reduces term by 7 years to 17 years)
8) Do you face any barriers to switching? Single Income househouse now
9) What rates are you considering fixing at? Havent really looks into details yet
10) high BER rating Probably not - relatively new house. Approx 15 years but wouldnt say BER is very high

Thanks in advance!
 
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@ekuleo

You have correctly identified that the long remaining term is a key factor.

A margin of 1.15% is ok - not cheap and not dear.

ECB rates are expected to got to at least 2%, so you will be paying at least 3.15%

You can fix for 5 years for 2.35% or 10 years at 2.8%

But you will lose your tracker after the fixed rate period.

Compared to the 5 year rate, you will be paying about €1,500 extra interest a year. ( €181K @ 3.15% -2.35%).

You could look at this as a €7,500 premium for holding onto your tracker.

It's a tough call, but on balance, I would stick with the tracker.

Brendan
 
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HI Brendan,

Thanks for the info. Apologies I mistyped my first piece of info. It is ECB + 1.15% not ECB + 1.65%. My account says my current interest rate is 1.65% but I suppose thats taking into consideration ECB 0.5 + 1.15% and it hasnt taken into account the latest ECB increase in Sept yet or they just havent updated my account.

Would that 0.5 in the difference change your mind? If it went to at least 2% as you mentioned id be paying 3.15% (at least) which doesnt sounds too bad taking into consideration the term...

Thanks
 
My own position is similar to @ekuleo at this time with same outstanding balance and term but a better margin(+.75%).

One thing that I've found when looking around for info on future rates is that some commentators will talk about future rates for the deposit rate or the refinance rate and some not mention either!

This is important as the refinance rate is currently 1.25% and the deposit rate is 0.75% and it is the refinance rate that provides add their margin to.

From what I've read it's the deposit rate that is expected to hit 2% by the end of the year (.75% rise in October and at least 0.5% rise in December).
That could make the refinance rate 2.5% if it follows in line.
 
@Savvy

I use a figure of ECB rate of 2% for these calculations. But, of course, it goes higher.

The only thing we know for certain is that economists are terrible at forecasting rates.

All of this is based on ECB rates of at least 2%. That seems to be the consensus.

But no one was forecasting ECB rates of 0% before they happened.

Brendan
 
I have spent the last week thinking about this surrounded by piles of papers. A friend recommended here to help get some clarification. So, Brendan your insight would be greatly appreciated.


1) Existing tracker margin: ECB + 1.95%
2) Amount outstanding on your mortgage €113000
3) Remaining term 13yrs
4) Lender Ulster Bank
5) Value of your home €350.00
6) Might you trade up or overpay your mortgage? Have no intention of trading up but would like to overpay and bring the term down to 10yrs
7) Do you face any barriers to switching? No
8) What rates are you considering fixing at? Haven are offering 2.65 for 7 or 10 years but willing to switch to another provider if it makes sense.
9) Does your house have a high BER rating which might qualify it for a lower rate? Unsure. Have recently renovated, extended and insulated. Triple glazed but has solid fuel and oil heating.

Thank you in advance for any advice I keep going in circles.
 
@Willow#1

A margin of 1.15% is not worth very much especially as you have only ten years left on your mortgage.
Don't bother switching to Haven - there is a serious risk that by the time you get to switch, the rates will have increased.
Fix with Ulster now for 5 years at 2.35%.
Tell them to reduce the term to 10 years so that you do not face early repayment penalties on your overpayments.

After 5 years, your balance will be down to €60k and reducing rapidly after that.

So although ECB + 1.95% might be less than the rates available from AIB after 5 years, it will be on a much smaller balance.
 
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Sorry Brendan, I wrote that wrong. My rate is ECB +1.15 does that make a difference to you advice? Also the value of the house is 350,000 but I assume you got that.
 
@Willow#1

It's not as clear cut at 1.15% but I would still fix for 5 years.

When ECB rates hit 2%, you will be paying 3.15% so fixing now at 2.35% still seems correct. And ECB rates are more likely to increase beyond 2% than they are to fall back below it.

Brendan
 
Thank you so much Brendan, much appreciated.
 
1) ECB + 1.15%
2) No
3) 229,939
4) 25 years
5) Ulster Bank
6) 310,000
7) No and no
8) No
9) Haven't considered yet
9) No built in 60's

thanks
 
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