Here's why you should still consider an Ulster Bank mortgage 
Daragh Cassidy
Daragh Cassidy
Head Writer

Despite its announced exit from the Republic of Ireland, the bank isn’t shutting up shop just yet.

Back in February Ulster Bank made the shock decision that it was exiting the Republic of Ireland after over 160 years here. 

Ulster Bank has around 2,800 staff, 88 branches nationwide, about 15% of the Irish mortgage market and over €20 billion in deposits. So its exit is going to have huge ramifications.  

However the bank isn’t shutting up shop overnight. It will take several years for it to wind down its operations and it could be six years or more before it leaves the country for good. 

And for now at least, the bank is actually still open for mortgage business, meaning if you’re a first-time buyer, mover or switcher, you can still apply for an Ulster Bank mortgage. 

However you might be wondering why you should take out a long-term loan with a lender that’s due to shut up shop eventually.

Well, Ulster Bank still provides one of the best mortgage offerings right now.

Here are some of the reasons why:

  • Some of the lowest fixed rates on the market, starting from 2.20% 
  • The lowest four-year fixed rate in Ireland for those borrowing up to €250,000 and with a 10% deposit i.e. many standard first-time buyers: 2.45% for homes with a BER of B2 or higher and 2.55% for all other homes
  • A €1,500 cash contribution towards your legal fees
  • A free home valuation (usual cost c. €150)
  • The ability to overpay on your fixed rate without penalty 
  • Up to 50% off your home insurance in year 1 
  • Choice of a longer-term fixed rate of up to 10 years
  • Lending to all areas i.e. urban and rural

But what happens when Ulster Bank leaves?

Ulster Bank is currently in talks with various lenders about buying its mortgage book.

However, by law, any new lender who takes on Ulster Bank's business has to adhere to the same original terms and conditions. So if you sign up to a two, three, five or even 10-year fixed rate with Ulster Bank now, nothing can change during that time no matter who your loan gets sold to later on. In other words, your interest rate and monthly repayment will stay the exact same.

You’ll also have the same protections under the Central Bank’s Consumer Protection Code as at present. 

What happens when I get to the end of my fixed rate?

When you get to the end of your fixed rate your available choices will depend on who your loan has been sold to - so yes, there is some uncertainty here. 

However there is nothing to stop you switching to another lender at this stage if you don’t like what’s being offered to you. 

At the moment it looks like PTSB could end up with most of Ulster Bank’s residential mortgage book meaning you'd have to go with their rates after your fixed period is up (unless you switch of course). However a new, foreign lender could also come in, and perhaps offer even more competitive rates than Ulster Bank or PTSB are at present.  

I’m hearing talk of vulture funds - should I be worried? 

Vulture funds have a particularly bad reputation in Ireland partly due to the tabloid media and politicians hyping things up and not understanding what they actually do. 

A vulture fund is simply a company that primarily invests in debt considered to be very weak or in default. Your consumer rights as a mortgage holder with a vulture fund are no different to what they are with any other Irish bank or lender and you will have the same protections as everyone else under the Central Bank's Consumer Protection Code. 

In fact, research has shown that customers who are in financial distress have a far better chance of having some of their debt written off with a vulture fund as opposed to a bank. So don't get worried if you see talk of loans being sold to one of these funds.

However there will likely be huge political pressure on Ulster Bank and the Government to not allow the sale of any loans to vulture funds so this may not even be an issue that arises.  

Secondly, vulture funds prefer to invest in highly distressed or bad debt - that’s not the case with the majority of the loans that Ulster Bank currently has. The simple fact is that most vulture funds won’t be remotely interested in Ulster Bank’s mortgage business. 

Compare

Would you still consider taking out a mortgage with Ulster Bank? We’d love to know your thoughts.

Of course Ulster Bank isn't the only provider with competitive rates right now. 

Depending on your situation, you could get a rate as low as 1.95% with Avant Money for example. 

Before making a decision, easily compare all interest rates and offers from all 10 lenders in Ireland with our free and easy-to-use mortgage calculator.

And when it’s time to apply for your mortgage, you can submit an online enquiry through our new mortgage broker service and one of our experienced financial advisors will call you back to get your application started.

You’ll be happy to hear that our mortgage broker service is entirely free and is fully digital from start to finish, meaning everything can be carried out online from the comfort of your home. And it's completely paper-free too! 

You can learn more about our mortgage broker service here and to learn about how your mortgage application will be assessed, take a look at this guide.

Learn more about mortgages

For more information before applying for a mortgage, you might want to consult our range of helpful guides:

We recently released an episode of our bonkers.ie podcast where we discussed the movement in the mortgage market recently. Take a listen to learn more about the mortgage options available to you.

If you have a current account or savings account with Ulster Bank, here’s what you need to know about the bank exiting the Irish market.

As always, we’re happy to answer any questions you may have. Feel free to comment below or reach out to us on social media. We’re on Facebook, Twitter and Instagram.