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Pay off tracker

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  • 10-07-2013 10:21pm
    #1
    Thestart
    Registered Users Posts: 130 ✭✭


    Hi all,
    First time post!!
    I have a tracker top up of 38k with 18 years left to pay at 1.05% above base rate.
    It's with ICS buildings society.
    My question is if I ask to pay off in one go will I get a discount? Has anyone experience of this situation?


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    #2
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,380 CMod ✭✭✭✭Pawwed Rig


    You could ask. Some banks were offering incentives for people giving up their trackers but I haven't heard of it for a while now.

    I would caution you to think long and hard before paying it off. You have a loan that people dream of. Id there is anything else you could do with the cash rather than pay down your mortgage then you should investigate that first


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    #3
    Shedite27
    Registered Users Posts: 9,396 ✭✭✭Shedite27


    Could you not put the money in a high interest demand account for a few years and make money off he transaction? You'd get more interest than you're paying on the mortgage so could pay it back then and have some extra.

    PS. Good problem to have!


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    #4
    Thestart
    Registered Users Posts: 130 ✭✭Thestart


    Shedite27 wrote: »
    Could you not put the money in a high interest demand account for a few years and make money off he transaction? You'd get more interest than you're paying on the mortgage so could pay it back then and have some extra.

    PS. Good problem to have!

    I could but would like to get rid of mortgage and get a bit of a discount if possible. If anyone out there has been successful in getting any discount from there mortgage company I would be delighted to hear!!!
    Thanks.


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    #5
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    UNlikely as its a secured debt and they have the house secured so why would they accept a discount? You could try hard ball them advising you have come into some money and are considering between savings or paying off mortgage and see would they discount it, chances are they wont. Also if they do discount it be warned this would be recorded on ICB as settled for a lesser figure. THis wouldnt look as well. Ultimately you have no cleared the full debt due but agreed to settle for a reduced amount.


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    #6
    jhegarty
    Registered Users Posts: 6,440 ✭✭✭jhegarty


    PTSB were offering 10% bonus on lump payments for trackers.


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    #7
    Tigger
    Closed Accounts Posts: 16,705 ✭✭✭✭Tigger


    Shedite27 wrote: »
    Could you not put the money in a high interest demand account for a few years and make money off he transaction? You'd get more interest than you're paying on the mortgage so could pay it back then and have some extra.

    PS. Good problem to have!


    after dirt?
    i doubt it
    need to get 2.2% and you can't get that unless its a 5 year term acc
    i dont think that the euro rate will stay at for 5 years
    i would be interested in a high interest demand acc that pays 2.2 on 38k if you know of one
    rabbo do 2.25 on 20k but only 1.75 on the balance
    also Unearned income for will become subject to PRSI in 2014. This means that PRSI will be payable on income generated from rental income, investment income, dividends, interest on deposits and savings.i haven't worked this out but i'd guess you need to get 12-15% more so you'd need to get 2.55 on the 38k
    tracker works out better and much better with a discount


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    #8
    Ballycumber
    Registered Users Posts: 1 ✭Ballycumber


    I'm not sure what rate the Irish banks are borrowing money at but it must be costing them a fortune to service trackers at ECB + 1.05%. With the recent announcements from Frankfurt about kleeping the ECB rate low for at least another year and only gradula increases thereafter coupled with strong hint that the ECB rate might go even lower, it must be in the banks interest (no pun intended) to buy you out.

    I too would take some comfort in paying off some of my tracker mortgage but, unless I am miscalculating somewhere, its seems to be a "no brainer" to hold off. Equally, it seems to me like a no brainer for the banks to make a decent offer to tracker holders.

    Guys and gals - have I got this wrong or am I missing something here?


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    #9
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    Ballycumber wrote: »
    I'm not sure what rate the Irish banks are borrowing money at but it must be costing them a fortune to service trackers at ECB + 1.05%. With the recent announcements from Frankfurt about kleeping the ECB rate low for at least another year and only gradula increases thereafter coupled with strong hint that the ECB rate might go even lower, it must be in the banks interest (no pun intended) to buy you out.

    I too would take some comfort in paying off some of my tracker mortgage but, unless I am miscalculating somewhere, its seems to be a "no brainer" to hold off. Equally, it seems to me like a no brainer for the banks to make a decent offer to tracker holders.

    Guys and gals - have I got this wrong or am I missing something here?

    There is nothing "no brainer" about it. Unless the OP can save at a higher rate than the mortgage is at then it isnt worth it. Rates for savings are also low and when subjected to DIRT its even lower so unlikely would be able to save at a higher rate of return than the mortgage interest rate.


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