PTSB 10% offer... not quite 10%!

[Guelder]

I don't know if anyone is aware of this, but I find this to be a very sneaky and underhanded by PTSB by way of advertising their "10% Bonus" offer.

Every website and newspaper article I have read in relation to this offer has described it in simple terms by way of;

If you pay 10k, the PTSB will take 11k off your mortgage.

You're getting a 10% bonus.

I recently enquired as to what my settlement figure would be, and I most definitely would not be benefiting of a 10% discount.

For example;

Say you have 81k left on your mortgage.

One would assume that in getting the 10% bonus, PTSB would be in effect, writing off 8,100k of the 81k, right?

Not so.

What PTSB are in effect doing is taking off their discount first on the total, which say in this instance comes to 72,250, THEN they take off the 10% discount, so in effect you are getting the 10% off their discounted figure, not the whole sum as one would assume.

So your discount now stands at just 7,225 instead of 8,100.

In this case the discount works out at approx 9% and not the advertised 10%.

This completely contravenes everything I have read thus far on this offer.

 

[Baggers]

From what I read on the subject you get 10% of the amount you pay OFF your mortgage, not 10% of the amount due.

To use you example above if you had a mortgage of €100,000 and paid off €81,000 you'd actually have €89,100 taken off the mortgage.

In order to claer the €81,000 mortgage you would have to pay €73,640 and receive the bonus of 10% €7,360 to clear it.

 

[Brendan Burgess]

Hi Guelder

Say you have 81k left on your mortgage.

One would assume that in getting the 10% bonus, PTSB would be in effect, writing off 8,100k of the 81k, right?

Eh, no! you would get 10/110 of your mortgage or 9%

This completely contravenes everything I have read thus far on this offer.

No. It's not. It is exactly as you describe it yourself:

Every website and newspaper article I have read in relation to this offer has described it in simple terms by way of;

If you pay 10k, the PTSB will take 11k off your mortgage.

That is exactly right.


It's easier to understand it if you use round figures.

Amount repaid|100
Bonus|10
total credit given|110

So if your total mortgage is €110, you get 10/110 or 9% as Guelder calculated.

Brendan

 

[orka]

Every website and newspaper article I have read in relation to this offer has described it in simple terms by way of;

If you pay 10k, the PTSB will take 11k off your mortgage.

Correct.

You pay 10K, PTSB will take 11K off your mortgage (10K + 10% of 10K)

You pay 70K, PTSB will take 77K off your mortgage (70K + 10% of 70K)

You pay 72,250, PTSB will take 79,475 off your mortgage (72,250 + 10% of 72,250) - which matches your figures so it all looks consistent with the advertising.

 

[Guelder]

Thanks for the replies.

Apologies if I have taken this up incorrectly.

I got my settlement letter a few days ago, however the way it's calculated is confusing to me..

To use the exact figures:

The full redemption amount due is: 80,905

This is the full amount due on the mortgage, I would be looking to pay this off completely.

I thought that availing of their 10% offer, this would take 8,090 from the above figure, making the amount payable 72,815. Simples, right?

However, the figure they have given me is:

73,550

Plus 10% bonus on this figure - 7,355

Should it not be 80,905 - 8,090 = 72,815 as opposed to 73,550?

The way I have read it described in many websites, newspaper articles etc.. is that if you pay off 5000, you get 5,500 off. Pay off 10,000, get 11,000 off, pay off 100,000, get 110,000 etc etc...

It doesn't seem quite as straight forward the way they are calculating it?

 

[T McGibney]

To use the exact figures:

The full redemption amount due is: 80,905

This is the full amount due on the mortgage, I would be looking to pay this off completely.

I thought that availing of their 10% offer, this would take 8,090 from the above figure, making the amount payable 72,815. Simples, right?

However, the figure they have given me is:

73,550

Plus 10% bonus on this figure - 7,355

This sounds perfectly correct to me, given that €73,550 + €7,355 = €80,905.

ie for every €1 you pay, they credit you with an additional 10c.

 

[WindUp]

"you pay off 5000, you get 5,500 "

so you pay 73,550 you get 7,355 (10%) of what you pay
= 80905 off in total

 

[orka]

The way I have read it described in many websites, newspaper articles etc.. is that if you pay off 5000, you get 5,500 off. Pay off 10,000, get 11,000 off, pay off 100,000, get 110,000 etc etc...

It doesn't seem quite as straight forward the way they are calculating it?

The 10% is calculated as a % of the amount the person is paying, not the amount due or the amount being taken off. Looking at the 'pay 10K, get 11K off' example, the 1K 'bonus' is 10% of 10K, not 10% of 11K. In your example, you are getting 10% of 73,550 (=7,355) to pay off a total of 80,905. The 10% bonus is of the amount you pay, not the amount you owe. So pay 73,550 - get 80,905 off.
It's not a straightforward calculation in that you can't work out an even % of the amount outstanding - you have to divide it by 1.1 to work out how much to pay to clear the loan. But it is consistent with their advertising - pay X and get a bonus of 10% of X.

 

[Guelder]

Thanks for all the replies, greatly appreciated. I clearly got this arseways. Yes, maths isn't my forte!

 

[DB74]

I thought it was restricted to max 50% of the o/s balance

 

[Guelder]

DB74; it was when the offer was initially introduced, but the cap at 50% has now been abolished, so you can avail of the offer to clear your entire mortgage.