Will Ulster bank do deals or make a huge loss on Offset Flexible Tracker Mortgages.

Well, at present there is a physical branch nearby, as well as having online access. Is it not reasonable to expect this to remain the same going forward?

So what’s the verdict? Add savings to equal the mortgage and not pay any interest, or not? Pros/cons please.

Ulster won’t negotiate with me.

By matching my outstanding mortgage in my offset account, am I severely reducing my chances of future negotiations with whoever ends up owning my mortgage?

Also, from way back, I remember an Ulster member of staff saying that once my savings matched my mortgage, or went over a tipping point, they would automatically be used to pay off my mortgage!

Regarding adding savings to equal the mortgage, if you put those savings on deposit elsewhere you'll get absolutely next to nothing, and what you do get you then have to pay DIRT tax on. If you put them in an offsetting account against your mortgage, then you're essentially getting a return equal to your mortgage interest rate. So if your mortgage interest rate is 3%, your offset savings is saving you that amount. To my mind that is a very efficient use of your savings because I'm not aware of any savings account out there that would give you 3%, and you don't have to worry about DIRT. I'm open to other viewpoints on that though.

Regarding your question about matching your mortgage with savings and that affecting any potential negotiation of a discount, I have no idea if that makes your mortgage more attractive to them or less attractive to them, in the context of them selling the mortgage on to another institution. One one hand, I can't see how they are making money off you if you're not paying interest. On the other hand, your mortgage from their perspective is safe as houses, they know that you have the money to cover it. I really don't know. I imagine that if a buyer is looking at taking these on, first and foremost they will be looking to make money on whatever mortgages they buy. Bear in mind that they will most likely need to offer the same terms and conditions and features as Ulster Bank do, ie. the ability to offset. A buying bank would need to build these capabilities before they can accept them, I'd say if UB find anyone to take these on they will probabably have to offer a big discount. There's also a chance that UB won't find anyone to take these on and will need to keep managing them themselves.

And finally to your last point about your mortgage being automatically redeemed if you match it fully with savings. That does not happen. I'm offsetting the full amount of my mortgage with savings and have been for some time, and that did not trigger an automatic redemption.

I think there's an element of wishful thinking in that. I would imagine that the vast majority of these mortgages are not being covered entirely by savings. I'd say there's a wide range of how the offsetting is used across the whole mortgage book, ranging from no offsetting being used, to some offsetting being used, to some people fully offsetting. But I'd say there's probably not that many people in that latter category. So this book is probably profitable for some bank that has the capability to manage them assuming the price is right.

I think it will be a job-lot type of situation, they will either offload the whole lot to another bank, or they'll continue to manage them themselves. If they continue to manage these mortgages themselves they could take steps to keep their footprint as minimal as possible, ie. they could go to an online-only model, have an offsite call center to field queries from customers etc. I honestly can't see them offering discounts to customers to redeem their mortgages because what happens if some people can't or won't avail of the discount? They are back at square one and will need to continue managing the mortgage.

But this is all just speculation, us normal punters are only guessing what might happen. We'll know in due course, and there's nobody, apart from Ulster Bank themselves, holding a gun to their heads to get them to conclude their business in Ireland by a certain date. They could be at this for years.