Извините, этот техт доступен только в “Американский Английский”. For the sake of viewer convenience, the content is shown below in the alternative language. You may click the link to switch the active language.
At the end of November 2023, it was announced that Ulster Bank had begun contacting its 4,500 Offset Mortgage customers to advise them that the Bank was closing its Offset Mortgage accounts.
Since the Bank have decided they are leaving the Irish market, they have been unable to sell its Offset Mortgage Portfolio because these mortgages have complicated features.
Therefore, in order to facilitate the sale of its Offset Mortgages Portfolio as part of Ulster Bank’s withdrawal from the Irish market, the Bank decided to do the following:
⦁ Remove the Offset Arrangement; and
⦁ Make an ex-gratia goodwill payment to compensate customers for this change.
In removing the Offset feature of the mortgage accounts, the Bank is taking away a very significant key benefit and feature of these mortgages.
By way of example, the way the offset works is that if a borrower owes the bank €150,000 on an offset mortgage, and they have €50,000 on deposit or in savings with the bank, they only pay interest on the remaining €100,000.
Borrowers will no longer be able to save on their interest repayments by depositing money into a linked savings/current/deposit account which would automatically be offset against the balance owed on the mortgage.
This is important particularly given that the ECB rate has increased from 0% to 4.5% since July 2022 and the era of low interest rates seems to be over.
In recognition of this change, the Bank has decided to make ex-gratia or goodwill payments. In calculating the amount due to each customer, the Bank takes into consideration how borrowers have used the Offset Arrangement in the past and how much they would have saved until the end of the term of their mortgage were they to continue to offset.
The Bank states that in order to acknowledge that borrowers’ future offsetting might increase and that interest rates are unpredictable, they will double the amount calculated based on past usage of the Offset Arrangement.
However, we understand that almost 70% of Offset Mortgage customers have either never or only in a limited way used the Offset feature. For those customers, the Bank will make a payment of €5,250 consisting of €5,000 compensation and €250 towards independent legal advice.
Some of our clients have received the below letter. If you have received this letter please contact us as soon as possible for advices.