I want to know what do I have to do if I want to pay off the remainder of my mortgage to Ulster Bank, and how do I get the deeds for the house?
— Mr A.E.
The departure of Ulster Bank (and KBC) has thrown many people’s financial arrangements into disarray. People rarely change current accounts and now they are having to fight for attention from overburdened staff at the limited range of remaining banks in the Irish market. Moving direct debits and trying to secure basic banking services like credit cards and, if necessary, overdraft arrangements are adding to stress levels on both sides of the relationship.
But the Ulster Bank move has also given people the opportunity to reflect on their financial priorities and arrangements. Many families built up more savings than they would normally expect to during the Covid pandemic as restrictions on travel and entertainment meant there were fewer ways to spend the money they earned.
If our finances go flat, how will Ireland pay its bills?
One Border, two systems, endless complications: ‘My NI colleagues work from home while I am forced to commute to an empty office’
Geese and sharks show airlines the way to fuel efficiency
Barriers to cross-Border workers and an outsider’s view of the Irish economy
That has given them some unexpected financial wriggle room. As they are forced to switch mortgages to a new provider — or have them moved by default to AIB if they are tracker loans, or Permanent TSB for other Ulster Bank home loans other than those in default — many people like yourself are considering whether they should take the opportunity to pay off a chunk of their loan, or even the entire thing.
As long as your loan is not in arrears, doing so is very straightforward, although you do need to consider whether it is the best use of your money.
As I have written before, a mortgage is generally the cheapest money you will borrow. If you are confident that you will have no need to borrow from banks in the medium term for other purposes — financing children’s education, an updated car, building work to extend, revamp or retrofit your home or even allowing your credit card balance to creep up, for example — then it may make sense to use excess funds now to pay off your home loan. But otherwise, you should pause to consider.
On the other hand, the fact that savings are attracting little or no interest at a time of rising inflation does mean that leaving excess funds lying around in your bank accounts makes little sense.
If you are simply paying off the loan rather than clearing it as a result of switching the mortgage to a new provider, the process is fairly simple. You first have to contact the office in the bank that deals with your mortgage. Normally, I’d point you to the address that should be on any mortgage account statements you have received, but Ulster Bank has put a phone number on its website for people in your position. It is 01-7092500.
If you cannot get through — always a risk given the sheer scale of mortgage-switching activity going on right now in advance of the bank’s departure from the market — go back to my plan A and write to them.
You need to ask them for a redemption statement or final settlement letter.
This will formally set down your outstanding mortgage balance along with any interest due that has not yet been deducted. It will also let you know what the daily rate of interest is on the loan so that you can calculate anything extra you will need to pay between the balance indicated on the day the letter is sent and the time you actually pay off the loan.
Finally, it should indicate any early redemption fees if you’re on a fixed rate — though rival KBC is certainly waiving these right now on the basis that the bank is responsible for the current upheaval — and any other fees involved.
Ulster Bank says this “redemption statement” is valid for four weeks from the date it is issued.
Once the mortgage has been paid off, the lender should automatically let you have any paperwork relating to title of the property. They may make an administration charge for this — though, again, in the circumstances, you would hope not.
In Ireland, as in the UK, there are two parallel systems in place to confirm legal ownership of a property: Land Registry and Registry of Deeds. Your solicitor should be aware which one applies to your property. Deeds are the older, paper-based record while Land Registry is a State guarantee proof of ownership on a property, with all the details — including mortgage charges — entered on a folio in the registry.
If you are getting physical deeds back from the bank, it would be advisable to lodge them with your solicitor or some other safe and secure location because losing them, or having them damaged in a fire, flood or other accident can make life difficult for you if you subsequently try to sell the property.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice
