Ulster Bank will exempt variable rate mortgage customers who have already applied to move to a fixed product from its first interest rate increase, which is being implemented from Thursday.
In response to the European Central Bank’s (ECB’s) decision to begin raising policy rates in recent months, the NatWest-owned lender has announced a 0.75 per cent increase to its fixed term mortgage rates, which will apply to two-, four- and seven-year loans and its four-year fixed green mortgage product.
The exiting bank has also removed its five-year and ten-year fixed-rate mortgage products from the market. Variable rate mortgage products are unaffected.
Ulster Bank ceased mortgage lending to new customers and existing customers in the summer as it moved to wind down its operations in the Republic. Since then only existing tracker and offset mortgage customers who have applied for a fixed-term loan to move home or top up their existing mortgage have been offered new home loans.
The great Guinness shortage has lessons for Diageo
Ireland has won the corporation tax game for now, but will that last?
Corkman leading €11bn development of Battersea Power Station in London: ‘We’ve created a place to live, work and play’
Elf doors, carriage rides and boat cruises: Christmas in Ireland’s five-star hotels
In a statement the lender said it would “honour the original rates” offered to such customers if they have already applied, even if they have not yet received a formal loan offer.
“This is also the case for existing variable rate customers who have applied for a fixed rate with us but for whom that product switch has not yet been completed,” it said.
“Customers with fixed rates expiring in November or December 2022 will also be able to access existing rates up to the date of expiry of their current rate, in recognition of the fact that they may have planned to select one of our existing rates but may not have actioned that yet.”
Bank of Ireland, AIB, ICS Mortgages, Permanent TSB and Finance Ireland, Avant Money have each increased rates on some products since the ECB first moved in July.
Last week Ulster Bank said it is opening an initial redundancy programme as part of its withdrawal from the Irish market, which is expected to see 600 staff leaving the UK-owned lender on a voluntary basis from next March.
That equates to about a quarter of the group’s 2,400-strong workforce as of the end of August, said a company spokeswoman. A further 610 Ulster Bank staff are transferring on a phased basis to AIB and Permanent TSB as the two remaining lenders take over much of the exiting bank’s loan book. More than 160 have already moved.
Permanent TSB is in the process of taking over almost €7 billion of mortgage, small business and asset finance loans from Ulster Bank.
Earlier this month the NatWest-owned lender began to freeze deposit and current accounts, seven months after giving an initial wave of customers notice to find alternative homes for their banking.
It has initially focused on closing about 3,600 accounts that have been inactive for some time or have low levels of monthly transactions.
