Ulster Bank's proposal to deal with offset mortgages

Status
Not open for further replies.
Monbretia said:
Too many questions! Head won't work that fast :D

For starters lodging more than or equal to the balance of a mortgage directly to the mortgage is more than likely going to trigger a redemption of it unlike when you had it in the facility account linked to the mortgage. Now I suppose they might be able or maybe already have done something IT wise to avoid that.

Yes you would still make repayments as normal however obviously the loan would clear quicker as there is little (assuming you had to keep lump sum below mortgage balance to avoid triggering redemption) or no interest.

As for separating them you don't as such but if you were looking at the bank computer screen showing your account it would show mortgage balance and then a credit amount separately which is your lump sum, however I imagine statements etc would show net balance, again unless they change that.

Taking money out is probably similar to drawing down available facility now as in you write a letter in requesting it, lodgments I imagine would have to be bank transfer, not like you can walk in and lodge!

Regarding second part of your queries, I pay no interest and have not done for years as I have more in linked accounts than is owing on mortgage, I still pay the required monthly repayments which basically just come out of the savings and into the mortgage so it's same total overall balance just different breakdown. Of course I could just pay it off but as you say the available facility is handy if I wanted to buy a car for example, although mind you it wouldn't purchase much for me as the AF goes down over the years and what's left on mine wouldn't buy much but for others the amount could be substantial.

The Home Movers bit doesn't apply to me or to any of my friends/relations who have an offset, I would imagine the numbers for whom this might be an issue could be small, they may be retaining it in some small way anyway, it would be easily done and wouldn't need any fancy IT, it would simply mean opening a new mortgage at same rate for same amount and as it would be a standard annuity mortgage from bank point of view should be fairly simple to implement if they need to keep it.

Basically for me it's a great deal, I didn't get letter yet but know the most I will get will be the minimum amount which is still a lot better than nothing! I made great use of that mortgage over the years and am lucky that it is very small now and I could have cleared it years ago but held on to it just in case, luckily!
Click to expand...
Thanks for taking the time time to a) read my message and b) respond to it :)

Some great info there, very much appreciated
 
Last edited:
Layoftheland said:
Just got the letter. Think it's good news but haven't read the small print. But good to read that there shouldn't be tax implications, I'd be inclined to put it into the mortgage
Click to expand...
I'd like to get the tax situation confirmed. Why are Ulster bank in the FAO saying that 1)you should get independent tax advice 2) that they will not pay any tax or liabilities that may arise.
 
Surely there is no tax implications as it is a payment on future losses due to the contract change how the hell can they tax it.
 
Keninf said:
I'd like to get the tax situation confirmed. Why are Ulster bank in the FAO saying that 1)you should get independent tax advice 2) that they will not pay any tax or liabilities that may arise.
Click to expand...
They're prob covering themselves with the independent tax advice issue, perhaps tax is an issue for some specific situations like tax residency (have no idea, just an example). The letter includes an annex looking for ID and evidence of residence
 
Layoftheland said:
They're v careful with the wording ex-gratia goodwill payment
Click to expand...
If they use the word "compensate" or "compensation" then they are leaving themselves wide open to challenge. It would be an admission that they know they are on shaky ground with this (which I think they are). Over on boards.ie some folks are saying they have gotten offers of 26K and 76K for example. Banks just don't give out those sums of money "by favour", it's compensation for loss of offsetting benefit, however they want to spin it. I think the whole thing stinks a bit, but they'll probably get away with it because a lot of people will be happy with the offer.
 
Maybe the issue could be owner-occupied vs investment property. I certainly hope so or this is a bad offer for me with the level of offsetting I had.
 
Yes, Ulster Bank has the legal right to make these changes, as outlined in the letter we sent to you. In our letter we set out the relevant sections of the “Ulster Bank Offset Banking Terms and Conditions” which allow us to remove your offset facility, close your Current Plus/Facility/Instant Access Plus account(s) and to make consequential changes. These sections are:

Section A Conditions 4(a), 8(d) and 10;

Section B Part 1 Conditions 5.2 and 7;

Section D Conditions 15, 16 and 18.

The full terms and conditions are available to download on our website at www.ulsterbank.ie/brochures.

That's from their FAQ. So they claim to, I'd suggest raising questions with Central Bank/Regulator.
 
Layoftheland said:
The letter includes an annex looking for ID and evidence of residence
Click to expand...

Saw this. It is not a sinister request.
To the best of my knowledge it is a requirement under Irish law that financial institutions have up to date correct information about their customers. I think it's to do with anti money laundering.
Ulster Bank are just covering their own backsides with this request.
 
Awaiting my letter but everyone who has this type of mortgage needs to get together the only fair way for Ulster bank to get out of this obligation and its a legal entitlement to the mortgage holder is to give the full amount that can be offset. They also need to make sure its measured for the full length of the mortgage as if your paying off more than the amount you can reduce your payments and elongate the mortgage period back to its originally end date. They also have to factor in the amount in your facility as if you have 50k in it you can put that in your account and then the interest on this will be saved also. Those who have not availed of the one time move should also look at this I fortunately moved about 3 years ago so it doesn't apply but if you move and have a bigger mortgage it means by offsetting you are saving more on interest.

I mean everyone here got these mortgages back in the period of 2000 and 2007 they were no longer available after this so its an older cohort and no doubt they will have parents who are close to end of life which means some sort of inheritance sooner rather than latter (I know that is a cold way of looking at things but it is a real factor) not to mention some peoples pensions with a lump sum kicking in.

Questions for Ulster bank would be as follows

How can Ulster bank realistically base 4500 (possibly 9000 mortgage holders if bought as a couple) persons future finances into one sum.

How can they predict a competing interest rate which they are basing compensation on, I mean back in the 80s we were hitting nearly 17% for mortgage interest and then we have the opposite of this in that we have just had a period of all time low interest rates (0%) for about a decade and now they the rates have ramped back up very very quickly. How anyone can realistically pick this figure and stand over it is nearly impossible and the person who has will really need to explain it..

Any solicitor should be able to argue this I wouldn't be cashing any cheques yet maybe use the 250 and consult a solicitor but it is a good idea to keep ideas floating in here as if 4500 mortgage holder or a decent % go through the one solicitor and make a big enough stink Ulster bank will have to come back to the negotiating table with a bigger sum.
 
Puddle duck said:
what if I say no to the offer? do we actually have a choice?
Click to expand...
Everyone has a choice they cannot just say there you go its that way or the high way and with the recent fines they had to pay due to the tracker mortgage scandal will also be in their mind. I have outlined what Ulster bank has to do to remedy this situation for the mortgage holder if they dont then if a high % of mortgage holders band together for a court case they will have to come back to the negotiating table.
 
Keninf said:
Yes, Ulster Bank has the legal right to make these changes, as outlined in the letter we sent to you. In our letter we set out the relevant sections of the “Ulster Bank Offset Banking Terms and Conditions” which allow us to remove your offset facility, close your Current Plus/Facility/Instant Access Plus account(s) and to make consequential changes. These sections are:

Section A Conditions 4(a), 8(d) and 10;

Section B Part 1 Conditions 5.2 and 7;

Section D Conditions 15, 16 and 18.

The full terms and conditions are available to download on our website at www.ulsterbank.ie/brochures.

That's from their FAQ. So they claim to, I'd suggest raising questions with Central Bank/Regulator.
Click to expand...
Yet not one of these mortgages where negotiated with Ulster bank they were done with First Active. Its a contract which they cannot just break and they will be open to all kinds of law suits unless they pony up what I have outlined.
 
There is the option though to do the 'pay and redraw' thing which is really a basic sort of offsetting and while not the same thing it has the potential to save a lot of interest too, best suited to lump sums though.

PS having just got my letter today I'm now unclear about the 'pay and redraw' thing, they seem to be equating it to the available facility so different to the way I understood it initially!
 
Last edited:
fliball123 said:
Any solicitor should be able to argue this I wouldn't be cashing any cheques yet maybe use the 250 and consult a solicitor.
Click to expand...

I was ecstatic with the news the other day and thinking of taking the money and running, but sure no harm asking a solicitor's opinion about some of the points you raised.
 
A lot of peoplle unhappy over in boards.ie. talk of people banding together to get a solicitor in case anyone here is unhappy with their offer
 
fliball123 said:
A lot of peoplle unhappy over in boards.ie. talk of people banding together to get a solicitor in case anyone here is unhappy with their offer
Click to expand...
The more I look at it the less inclined I am to immediately accept it. I think it's definitely worth looking further into
 
Target106 said:
The more I look at it the less inclined I am to immediately accept it. I think it's definitely worth looking further into
Click to expand...

Mortgages Support

Ulster Bank is closing. For help and support with your Mortgage queries visit the Mortgages page on our dedicated Customer Support Hub. We're here to support you through this change.
www.ulsterbank.ie www.ulsterbank.ie
I'm not happy with these changes, so I don't want to accept the goodwill payment until you have considered my complaint

Your acceptance of the goodwill payment does not affect your ability to raise a complaint. If you do want to raise a complaint, we will ensure that it is considered in accordance with our normal processes however before you do this it would be good if we could get an understanding of the nature of your complaint as we may be able to help you. However irrespective of the complaint all Current and Deposit accounts will become non operational from 23rd May.

The ex-gratia goodwill payment will be paid on or shortly after 10 January 2024.
Click to expand...
 
The challenge is so few people actually understand this product so solicitor/ financial advisor might be hard to find - no idea where to start but happy to join a group. Also is it strange that nothing is in the press about this?
 
Status
Not open for further replies.
Back
Top