The imminent decision over whether Ulster Bank may exit the Irish market has created some uncertainty for those who hold mortgages with that bank. To date, no decision over whether Ulster Bank will exit has yet been confirmed but we wanted to set out some of the issues that customers may be considering.
Any such exit may involve Ulster Bank in offloading its mortgage business by way of a portfolio sale to other banks or non-bank lenders (commonly known as vulture funds). Alternatively, Ulster Bank may decide to retain its existing mortgage book but employ a 3rd party organization to be responsible for the ongoing day-to-day servicing and management of the loans. Regardless of the decision, that process will inevitably take some time to set up and, in the case of a portfolio sale process, will most likely will take place gradually over a number of years.
The first and most important thing to be aware is that as an existing customer, regardless of whether Ulster Bank does decide to exit the Irish market and sell or appoint a third party to service its mortgage, the terms and conditions (e.g. the interest rates and the repayment term) of your mortgage loan will remain unaffected. You will also be entitled to the same consumer protections.
Nevertheless, it may be a good opportunity to review your existing mortgage terms (and that goes for non-Ulster Bank customers equally) to decide whether it may be cost-effective to switch. Often, other lenders will offer better terms to new customers, so it may pay to investigate if those terms are better than your existing rates. It is important to bear in mind that if you are currently availing of a fixed rate of interest, there will most likely be additional breakage fees payable to end the fixed rate contract early. However, depending on the length of term remaining on that fixed interest rate and the savings been achieved, it may still pay to break that fixed rate contract early.
Your solicitor will need to arrange the release of the old mortgage and the registration of the new mortgage, which will involve reviewing your title documents to certify the title to your new bank. However, in our experience those costs are typically outweighed by the savings achieved and it is worthwhile to explore whether it is economic to switch. Please contact one of our solicitors to discuss and we can advise you of likely costs and what is involved.