Ulster Bank/First Active Offset mortgages, here's the answer to previous thread!

joeymcg

I was the same

phormium

https://www.boards.ie/discussion/comment/121431226#Comment_121431226

Odd! I haven't heard of that as an issue, shouldn't have happened, I still have 2 savings accounts open along with the current/facility account, never heard a word from anyone about closing them. Speaking to another friend yday and she has the max amount of savings accounts and was working with UB until they closed, we were talking about the accounts and no mention of any issues with keeping the accounts open.

DB2023

Agree. People with considerable time left really should get financial advice. The benefits you could be losing are potential huge. I reckon with the offset I'm saving 6k a year on interest currently (obviously a lot less when rates were much lower). But how do you price that in? Who knows where rates will go over next year, never mind 10+ years

coughlsu

Hi everyone,

got my letter today. We were offered minimum 5k. Mortgage is 110k with 12 yrs left. we never used the offset much HOWEVER, recently I’ve been diagnosed with serious illness and we got financial advice. We were advised to move savings into mortgage account to offset. I moved 20k in July and have shares worth 25/30k I can move in January. (I can’t cash them in until then). Future shares worth a further 15k could be put in 2026. Based on this I think our future savings would be a lot more than ulster predicted. How do I start to challenge the 5k?? Is there a date when you have to move your saving in by in order for them to consider it??

(apologies I’m clueless- got mortgage in 20s and didn’t even realise what offset was )

paul321123

All savings accounts were not closed, I have facility and instant access account still open

fliball123

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.

Jim2007

https://www.boards.ie/discussion/comment/121431158#Comment_121431158

Saving account, current account and mortgage account are just generic names like car, van and lorry, so you need to know exactly what financial products were closed and what ones the poster is referring to. If is possible there are financial products open that people would consider to be savings accounts at this time.

phormium

https://www.boards.ie/discussion/comment/121431465#Comment_121431465

They are offering though that 'pay and redraw' facility which while not as functional and a more basic sort of offsetting does kind of the same job if you have lump sums to deposit. This is something that was available by several banks on different mortgage types, you lodge a lump sum directly to the mortgage account and it kind of stays there as a credit until you want it again. The benefit is you are only paying interest on net outstanding balance so while your mortgage is say 100k and you lodge 20k that you might want to redraw then pay interest on net 80k until you take it out again.

It's not as convenient as the offset facility account where you could hold any amount and do day to day transactions, I'd imagine you would have to keep the credit balance below the outstanding mortgage or it would trigger redemption of mortgage but it's still a way to save interest.

Edit: Got my letter this morning, lot of reading but bottom line is €5,250 as expected, I used my offset to it's best but I have a very small balance and only a few years left so I will clear fully in January.

phormium

OK scrap all my last post, I seem to have misunderstood their 'pay and redraw' option, that seems to relate to the old 'available facility' amount, I had read somewhere that it was where you could lodge and withdraw, will have to read up more!

Actually on reading to next page I'm still a bit confused, are they referring to just the amount you drew down on the available facility or to any extra random lump sum amounts?

kerryjack

I do find it a bit odd that this is all done very quickly and moneys paid out in 4 or 5 weeks coming up to Christmas and they might think or hoping people will just take the Money and be too preoccupied with Christmas to start complaining like I said last evening I was happy enough but looking online there is plenty people not so happy.

phormium

https://www.boards.ie/discussion/comment/121431915#Comment_121431915

Definitely timed it to coincide with January credit card bills!

kenif

Pay and Redraw is just as it is now if I understand it correctly. At any time you can pay down your mortgage with a lump sum. At and time you can top back up your mortgage to your available facility... Just have to remember your facility goes down each year so the closer to the end of your term the smaller it gets.

fliball123

https://www.boards.ie/discussion/comment/121431915#Comment_121431915

It smacks of this and its not going to end well for Ulster bank. Ramming a one size fits all solution is never going to work they are going to paying out more for legal fees by the end if they don't pony up the differential I laid out in a previous post.

DB2023

Still no letter..so no idea of next steps

kenif

Or else you'll end up giving all your goodwill payment to a solicitor and Ulster Bank will still walk away.

You could very well be right but I'd try go central bank/regulator or whatever else before paying a solicitor for you to explain how this product works.

Ulster Bank are throwing 58million at this, plus what ever the sale write down will be they won't mind the legal fees as much as the man in the street.

fliball123

https://www.boards.ie/discussion/comment/121431979#Comment_121431979

Same here anyone who has a letter is there a contact number to ring if you have queries?

phormium

https://www.boards.ie/discussion/comment/121431944#Comment_121431944

Yes, I think you might be right. It's not the same as say lodging 30k of your own money to your mortgage and wanting it back in six months as I understood it, the amount you get to take back will be limited by your available facility which might not match the 30k? It would be hard to time that depending on amounts and the reducing facility amount!

It doesn't matter to me as I will be clearing the mortgage which is small at this stage but if it worked the way I thought initially then it was still a more restrictive but similar interest saving option.

Dfair3108

Anyone have a solicitor they'll be using for advice, or can recommend ..... we've approx. €330k left & 20yrs.... and 100% will be due inheritance in the next numbers of years.... definitely worth more than the €5k offered!

rameire

https://www.boards.ie/discussion/comment/121431979#Comment_121431979

Wait till you get the letter.

Their customer service team seem to have standard responses at hand so may not be able to provide the details on the letter you currently dont have.

phormium

There is a phone number on the letter.

fliball123

https://www.boards.ie/discussion/comment/121432002#Comment_121432002

Did you ring them and ask them about this?? I totally agree with you anyone not happy should band together much stronger as a multiple as Ulster bank will be trying to sell all 4500 mortgages together and if a high % are kicking up a stink and have a legal challenge it is going to delay them and ultimately cost them more to keep going in Ireland as well as legal fees?? I am yet to get my letter.

Dfair3108

https://www.boards.ie/discussion/comment/121432023#Comment_121432023

Yeah - they point blank said only monies in the offset account by 23/05/2024 can be factored in .....

DB2023

Are letters delivered normal post or registered? Wondering if it could arrive later or wait another day etc

kenif

Yeah you could be saying goodbye to that money.

Real world my facility is 13k now. If I payed off 30k... It becomes 43k.

I think it would take a while with continued repayments for that number to drop significantly. Just need to be sure of how they calculate the facility each year.

I think you should always be near that 30k ahead.... Think is no good though

Dfair3108

https://www.boards.ie/discussion/comment/121432049#Comment_121432049

Normal post. Got ours yesterday

Fran2001

Would be a good idea to find a solicitor who specialises with this kind of issue. I haven't got my letter but a work colleague did and got a large amount that is North of 50000.

As stated previously in other posts the figure should be based on potential savings from future possible life changes such as inheritance and pension lump sums etc.

fliball123

https://www.boards.ie/discussion/comment/121432039#Comment_121432039

Ah well give it a week lets see who else is not happy band together and get a solicitor on the case that is terrible that they think they can do this to people. They are giving very little time to mortgage holders I mean I rang them every month since they said they were pulling out and there was no information forth coming. I know you are annoyed chill for the week and see who else is unhappy with their lot and then go as a group strength in numbers and more of a chance of delaying their plans. There is also a discussion ongoing in askaboutmoney.ie so there will be others on there unhappy with this.

WhatsGoingOn2

Still waiting on my letter. My brother got his and got just over 90k, nearly enough to clear his mortgage, so obviously eager to see what I get. He had approx 200k left on his mortgage and over 100k offset against it.

fliball123

https://www.boards.ie/discussion/comment/121432084#Comment_121432084

Do you know how long he had left on his mortgage?

kerryjack

https://www.boards.ie/discussion/comment/121432084#Comment_121432084

Your brother nailed it and used it to perfection.

kerryjack

https://www.boards.ie/discussion/comment/121432084#Comment_121432084

Your brother nailed it and used it to perfection.

WhatsGoingOn2

https://www.boards.ie/discussion/comment/121432107#Comment_121432107

Approx 15 years

DB2023

I feel sorry for the people on here who said they had money in other savings not linked to their ub/first active mortgage account as they didn't know how product worked. Cost themselves a small fortune

paul321123

Just a taught that could be a big factor regarding who they sell your mortgage onto. For peoe who have a long time left this could be a major factor to consider. If they sell to the likes of aib or ptsb you know your payments will go up a relatively small amount relative to the ECB but if it is sold to a vulture fund then you could be potentially open to large interest hikes, this should be a big factor to consider for people who still have a large mortgage but as of yet there is no mention of who your mortgage will be sold to.

phormium

https://www.boards.ie/discussion/comment/121432312#Comment_121432312

It's a tracker though, it won't be going to any banks standard rates, will have to remain at 1.15% over ECB no matter who has it.

paul321123

Am I correct in saying that geatia payments are due into you account in early January, irrespective if your going to challenge this?. Also, I am happy with the payments that I will receive relative to what I have left to pay so will be paying down my mortgage when I receive these payments, so would I be correct in saying that I don't have to do anything regarding my accounts if I do this except transfer any money that is left to another account once the final payment is made

McSween

I note on the last page that id and proof of address has to be sent to them. I imagine anybody who sends this information is deemed to accept the situation

fliball123

https://www.boards.ie/discussion/comment/121432466#Comment_121432466

I think they have specifically said that you can object regardless of taking the money but I would be holding off this is their opening gambit they are looking to get out of the license for Ireland by 2025 so they are on a timer the more people tell them they do not want the offer the more likely they will have to come up with the full range of compensation. As they really don't need to be slapped with another financial regulator fine on top. Remember they paid double the 58million this is costing them they were fined 128 million so they need to thread very carefully on this and if they are not willing to negotiate they are going to have a lot of litigation on their hands which could tie them up meaning they may need to apply for a license again in 2025 and that is then nore cost again. So better to deal now with this and get people happy to have this taken away and their mortgage sold to a non-vulture fund Irish bank

paul321123

I'm not sure if it is an acceptance of the offer, more just for there recoreds, is there a date that they need these documents in, as I cant see any specific date to send them in by.

fliball123

https://www.boards.ie/discussion/comment/121432645#Comment_121432645

Id say any time before the 10th of Jan which is the date they are going to pay it but make sure you not being conned out of more Paul before you do so

Jim2007

https://www.boards.ie/discussion/comment/121431915#Comment_121431915

There is nothing particularly surprising about this. On the one hand the parent company has already made is provisions for the dissolution of Ulster Bank and it is now coming up to the end of the financial year, so they need to get it done. On the other hand they also want to give up their Irish banking licese ASAP to avoid having to comply with CB regulations going forward. In the weeks and months ahead we are probably going to see some more similar activities as the pressure to get this done ramps up.

MOD: No more idle speculation on these matters.

paul321123

It says that the gratis payment will be made on or around the 10th January, will this be paid irrespective of returning the documents they ask for or is it a condition that you have to return the documents to receive this,

Cody OHare

Is it taxable as Income?

fliball123

https://www.boards.ie/discussion/comment/121432788#Comment_121432788

No as it is to cover your potential losses from losing out on the offset mortgage facility so your not gaining anything.

preda

Thanks for your reply. There are zero calculations within the letter and no explanation of how they came to this figure. They offered 7,050 and 250 for you to get advice on changing your mortgage to another provider. The 7,050 is a double of the figure (as their goodwill gesture!!) they calculated I was entitled to. So that would be approx 3500 they originally estimated!!. I think they are chancing their arm to begin with. But I will repost to let people know how responsive UB are to review this.

fliball123

https://www.boards.ie/discussion/comment/121432840#Comment_121432840

Preda did you have much of a mortgage or anything in your offset and how long had you left to pay?

fliball123

Just to get an idea of how many people are unhappy with their good will payment could a mod or someone put a pole up a simple yes / no would suffice?

kenif

No one should be happy. Even people who are fully offset. They are getting a payment worked out at 4%(it seems). With no doubling. Which sounds conservative with so much volatility in middle east/Ukraine even Korea now. So unless they treat this as a write down and pay off their mortgage they could loose out massively too

Unfortunately it's not about being happy. Have Ulster Bank applied their terms and conditions correctly?

If so, they could have just closed our accounts, sold our loans n headed off with themselves.

Do get legal advice. Do talk to central bank/regulator. Even ask a question to Q&A in some of the papers. But aside from that make sure they have included all offsets, have got your term correct, calculated it all off the correct loan/facility amount as of 31st of August. Ask them to see that calculation and check or get it checked.

I don't think they have done this without central bank so I believe the dates they set out are fixed. Question everything as we all know how many mistakes they have made in the past!! But do get you affairs in order for the dates they have set.

soap1978

https://www.boards.ie/discussion/comment/121433969#Comment_121433969

How are you working out 4 percent,4 percent of what? And who is saying they are not doubling,people are getting 90 and 70 thousand how does 4 percent work out with that figure?

fliball123

https://www.boards.ie/discussion/comment/121433969#Comment_121433969

I would argue that if a high % of people tell Ulster bank they want to keep the current arrangement as it is better for them financially they cannot break the contact which is what they will be doing without there being serious repercussions remember they just paid 128million in fines to the regulator for the last time they decided to ignore contract law and break a contract with customers. They are also under the gun time wise . So my idea of a poll to see how many people are unhappy is about getting numbers and the the higher the number the stronger the case and it could force a delay for them which will cost more cash. I remember signing for my mortgage and the key phrase for me was that the offset facility will be available for the duration of the mortgage. That is set in stone and there is no amount of wiggle room for them. As you pointed out the fact they have offered these payments is a gambit that a high % will just take it and move on being grateful for a few quid in the back pocket and not looking at the actuarial cost of how much the customer is losing out on with what Ulster bank are doing. I also think the timing of doing it with the ECB rate rises play into this as well.