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Ulster Bank Closure Who Should I Switch to? Ireland 2022

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ulster bank closure

The impending Ulster Bank closure and the pull out of KBC this year from the Irish market is set to cause significant customer disruption.

There are over 1 million accounts and an estimated 500,000 customers with Ulster Bank and a further 300,000 with KBC. Dwarfing the scale of previous bank closures from Anglo, Danke Bank etc..

Closure notices for Ulster Bank customers are drop through customer’s doors by the end of March 2022 giving Ulster bank customers 6 months to switch to another bank, before your account is closed.

If you don’t switch by then, you will be simply issued a cheque with your remaining balance.

If you a have a mortgage with Ulster Bank this is set to be transferred to PTSB, but with PTSB’s rates some of the highest in the market it probably makes sense to look at switching that as well.

So what options are left for best current account, savings and mortgage?

Don’t panic there are some better and less expensive options out there than Ulster Bank and switching may not be as difficult as you think.

Switching Current Account – Ulster Bank Closure Ireland 2022

Best Digital Only Bank

If you don’t need to lodge cash or cheques then the Digital only banks N26 or Revolut are great options.

They have no monthly fees, the lowest once off fees and the best apps on the market. With features from kids accounts to trading in bit coin already built in and a really slick user experience.

They are also both covered under the EU Deposit Guarantees up to €100,000 the same as the non Digital banks.

One thing to watch out for though is some employers on old payroll systems may struggle with the EU Iban. This will only be a minority of employers however as under EU law everyone should have upgraded their payroll systems a number of years ago to be SEPA compliant.

Revolut already has 1.7 million customers in Ireland and recently became a full bank, so that’s why they are our pick of the bunch.

However, if you still need to lodge cash or cheques you have two options. Get someone with a traditional bank account to do it to their account and then send you the money or get yourself a traditional account from one of the banks below.

Traditional Banks

If digital only isn’t an option for you there are now 5 other more traditional banks you can choose from for your current account. The interest on all these accounts is pretty much irrelevant as it is so low, so what you are looking for is low fees.

If you don’t use your ATM regularly An Post or your local Credit union may be a good options. Both of these come in at €60 a year in fees. However, An Post charge 60c per per withdrawal and your Credit Union will charge around around the same so this can mount up quickly if you head to the cash machine once a week.

In that case we would recommend PTSB’s current account. It’s slightly more pricey at €72 a month, but withdrawals are free.

Switching Saving Accounts – Ulster Bank Closure Ireland 2022

Deposit interest rates are at record lows of around 0.5% with inflation heading for 8% or more, you should probably look at talking to a financial advisor if you have €10K or more to invest.

Investments can yield 4% per annum or more depending on the risk level and can help take the edge of inflation.

We review the best financial advisors for each region of the country here.

If you still want the security of a guaranteed rate the best rates are to be found from banks outside of Ireland. You can access rates up to 1.15% from banks across Europe on raisin.ie or consider a state saving account with around 0.6% interest rates.

If you have less than €10,000 squirrelled away then you may be better off leaving it or transferring it to your current account. The Digital Banks offer the ability for you to separate from your daily account with ‘vaults’ or ‘money jar’ features on their apps.

Switching Mortgages – Ulster Bank Closure Ireland 2022

Ulster Bank have sold their existing mortgages to PTSB and KBC to Bank of Ireland. This means if you have a mortgage with either you and your mortgage will transfer.

PTSB and Bank of Ireland have the highest mortgage rates in the market so many Ulster and KBC customers are considering switching to a different lender. If you are in your fixed rate period then PTSB and Bank of Ireland will have to honour those rates, but after that they could choose to hike rates increasing your monthly repayments.

Ulster’s non tracker rates range from 3.5% to 3.9% which are already some of the highest in the market.

So a typical Ulster mortgage customer on their 3.5% variable rate, with €150,000 remaining over 15 years would save €106 a month by switching to the best deal on the market, that’s more than €19,000 over their remaining term and would avoid the risk of a future rate hike.

Avant Money are offering €1,500 upfront for anyone switching their mortgage from Ulster Bank or KBC. The offer is available until the 31st of March and targets customers thinking of switching from Ulster & KBC as both exit the Irish market this year.

Switching costs are usually around €1,500 for solicitor and valuation fees combined, so this offer will make switching from Ulster and KBC effectively free.

At moneysherpa for example we offer an all in legal package including all outlays for €1,200 including VAT, while estate agent valuation fees are typically around €200. So €1,400 all in.

The repayment calculation is based on switching to Avant Money’s 5 Year fixed rate and using the switching offer to cover their upfront costs.

If you are a tracker however, sit tight. Any new owner will have to honour your existing terms.

You can see how much higher PTSB and Bank of Ireland rates are in the table below.

Compare
Follow on Rates
up to
50% LTV
Follow on Rate
up to
60% LTV
Follow on Rate
up to
70% LTV
Follow on Rate
up to
80% LTV
Follow on Rate
up to
90% LTV
Follow on Rate
Avant Money2.00%2.00%2.00%2.20%2.20%
ICS Mortgages2.45%2.45%2.45%2.70%2.70%
Finance Ireland2.75%2.95%2.95%2.95%3.15%
Haven Mortgages2.75%2.95%2.95%2.95%3.15%
AIB2.75%2.95%2.95%2.95%3.15%
KBC3.00%3.00%3.05%3.05%3.3%
Ulster Bank3.50%3.50%3.70%3.70%3.90%
EBS3.30%3.50%3.5%3.50%3.70%
Permanent TSB3.70%3.70%3.70%3.70%3.90%
Bank of Ireland3.90%3.90%4.20%4.20%4.50%
Probable follow on variable rates post fixed period based on current variable rates by provider

Switching Next Steps – Ulster Bank Closure Ireland 2022

If you have an account with Ulster Bank you will have to switch it in the next month, so act now to beat the rush.

When it comes to mortgages Ulster didn’t have great rates to start with (3.5%-3.9%) and have now been bought out by one of the banks with the highest mortgage rates in the State, PTSB, so now is a good time to switch to save now and to avoid higher rates down the line.

You can calculate your mortgage repayment switching savings here.

This applies for anyone with with a variable rate around 50% of Ulster Bank mortgage holders. If you are still in your fixed rate period then sit tight until you are 3 months from the end then speak to a broker. If you are on a tracker don’t worry, the new owner will have to honour your existing terms.

You can book a free appointment to check out if you would save here.

Daire McConnon - mortgage sherpa lead

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No hassle, in a 15 minute call our mortgage sherpa team will guide you on the journey. 

They will help you borrow, find you the best deal and make the paperwork painless.

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Daire McConnon - mortgage sherpa lead

Need help with your mortgage?

No hassle, in a 15 minute call our mortgage sherpa team will guide you on the journey. 

They will help you borrow, find you the best deal and make the paperwork painless.

Best of all, they are free as they are paid for by the lenders.

Book your free mortgage check

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