Ulster Bank to allow tracker mortgage transfer


ULSTER BANK says it is to allow people to transfer their much-coveted trackers to a new mortgage.

It is the only bank yet to commit to doing this, however the product does not apply to their customers wishing to move their negative equity.

Until now one of the reasons homeowners have been reluctant to move home is the desire to hold on to their cheap tracker mortgages.

About 52 per cent of mortgage-holders here are on tracker rates. By securing a tracker that only moves in line with the European Central Bank (ECB) rate, they have been able to avail of historically low rates.

Those who got an ECB rate plus 0.5 per cent are now only paying interest on their loans of 1.5 per cent, compared with variable rates that could be as high as 5.19 per cent.

Now Ulster Bank is allowing homeowners to keep the cost of borrowing at a moderate level by allowing them to move their tracker to their new home, whether they are trading up or down.

Frank Conway, a director with the Irish Mortgage Corporation, says the product represents the “missing link” in the mortgage market, as it should facilitate people needing to move.

“It creates a mobility that has been blocked up to now.”

Mr Conway adds that it is also a recognition from the bank that there needs to be a “common sense approach”.

However, as with all types of lending in the current market, only borrowers with good incomes and safe jobs should apply.

According to Ulster Bank, the deal will only be available to Ulster Bank residential customers who are up-to-date with their existing mortgage payments.

The new product will not apply to customers who are in negative equity, the bank says, although it is currently in discussions with the Central Bank on this issue.

According to a spokeswoman for Ulster Bank, it hopes that the negative equity proposition can be coupled with the porting opportunity to facilitate customers who can afford to move.

A spokeswoman for AIB has indicated that it has submitted a list of proposals to the Central Bank and so could be considering a similar move, while KBC also says it is reviewing its product offering.

At Permanent TSB, such a proposition is “under review”.