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Problem with mortgage deposit in savings account.

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  • 20-03-2015 1:58pm
    #1
    tea and coffee
    Registered Users Posts: 1,835 ✭✭✭


    Posting on behalf of a family member. They are looking for a mortgage of roughly 50%/60% LTV with their bank. They have a sizeable deposit (clearly ;) ). It's their first mortgage.

    Here's the rub. A large chunk of the mortgage deposit is (stupidly) in a 1 year fixed term savings account - in that same bank- and this account has a no break clause (it's in the terms and conditions, very clearly). They hasn't anticipated needing access so soon.

    I think their borrowing capacity *should* cover the shortfall, but what if it doesn't???
    Is it possible that the bank may offer a "bridging" loan on the strength of the deposit, or might it allow them to close the Savings account (despite it being "not allowed")? or are they likely to lose out on the mortgage/house here and have to wait.

    Any advice welcome. Thanks


Comments

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    #2
    TheQuietFella
    Closed Accounts Posts: 1,857 ✭✭✭TheQuietFella


    Isn't this a question that should be asked at the bank!!! :eek:


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    #3
    tea and coffee
    Registered Users Posts: 1,835 ✭✭✭tea and coffee


    yes, I just wanted to get an idea before they went in though. Seems the bank will break it for them, but it's unclear if there will be a penalty


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    #4
    AlmightyCushion
    Moderators, Education Moderators, Technology & Internet Moderators Posts: 35,078 Mod ✭✭✭✭AlmightyCushion


    tea and coffee wrote: »
    yes, I just wanted to get an idea before they went in though. Seems the bank will break it for them, but it's unclear if there will be a penalty

    Usually when breaking the term the only penalty is that you lose any interest you would have accrued. The actual money you put in isn't affected.


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    #5
    hfallada
    Closed Accounts Posts: 4,180 ✭✭✭hfallada


    The penalty for breaking a fixed term is lost of interest. I dont understand people who are taking out fixed term savings accounts at the moment. You can get 4% with a regular saver account from Nationwide UK Ireland, with 2 withdrawals each year. You wont get anywhere close with that with fixed term. Or KBC offers 1.5% on demand


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