Have a lump sum to pay down, can I negotiate remaining sum owing?

T

trying

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I have a mortgage of e140k left on a rental property that is now worth e250k. I was fortunate to just receive e90 from an inheritance and I intend to use that money to pay down the mortgage.

If I rang the bank (PTSB) and asked, do you think they might reduce the overall amount owing at all for receiving the lump sum upfront? Or is that just too silly to consider. It is not a tracker mortgage and it is not under water. I've heard rumors of banks making settlements with customers, but not sure if thats true or not. I now live outside of Ireland, so don't have a finger on the pulse!

Thanks.
 
They would have absolutely no incentive to do a deal.

You are paying your mortgage.
It's a SVR mortgage or maybe even on an investment rate.
It's in positive equity.

Brendan
 

I had a lump sum to pay down last year also - basically I purchased a property abroad out of equity released from our family home - we were mortgage free so had 100% equity in house. I sold property abroad took a hit on it, with proceeds paid down the equity mortgage I had taken out, met with official from the bank told him I had lump sum would they do a deal - absolutely not interested in doing deal at all. Good luck with trying and let us know if you are successful.

Angel59
 
Ditto

Also tried the same when clearing our tracker mortgage with BOI, even tried the Branch Manager, with whom we had dealt for many years, and he said they will absolutely not do any deals or give any discount for paying down or clearing tracker mortgages early.

But if you don't ask .......
 
They are not doing deals on trackers.
They are not doing deals on negative equity mortgages
They are not doing deals on people in arrears

So, it is reasonable to assume that they will not do a deal with someone on a Standard Variable Rate who has plenty of equity who is not in arrears.

Brendan
 
If rental income from the tenants is paying your mortgage plus the interest on your mortgage, why would you put any more of your savings into reducing this sum. Unless the rent is not covering the entire cost mortgage then that's different.
 
Hi Sadie

That is not really the way to look at it. The best way to look at it is "What is the best, and safest, after tax return on my €90k?"

1) Put it on deposit at 2.5% less Dirt = 1.6% after tax.
2) Pay off a SVR mortgage 4.5% less 75% of 50% tax = 2.8%

The net cost of the borrowing is around 2.8% so this is a much better use than putting it on deposit.
It is also 100% safe, whereas a bank could go bust.

trying - I assume you have no mortgage on your home? If so, you should probably be paying it off first as your are probably not getting any tax relief on it.
 
Brendan Burgess said:
They are not doing deals on trackers.
Brendan
Click to expand...

Has anyone figured out why the banks won't do a deal on trackers given that it would be in their interest (no pun intended)? Did the PTSB incentive scheme not help PTSB in relation to outstanding liability to trackers and if so why not offer it again?
 

It's not in their interest (or the taxpayers) to give a debt write down to someone who clearly doesn't need it.

The banks are not going to take a "hit" or a "loss" if they absolutely do not have to.

From the banks point of view people such as "Trying" are the dream customer. They are not in trouble, they have been meeting their repayments, they have cash in their pockets and even if they do get into trouble the sale of the property will clear the mortgage.

This is the kind of customer that the banks want on their books, incentivising them away with "deals" will leave them with "problem" customers - not exactly a selling point for them.
 
I agree with your points but not sure why PTSB offered the incentive originally then. Also regardless of being dream customers if it's costing PTSB to have the tracker then it's a loss - so it should be worthwhile for them to incentivise a customer to pay it off?
 

This is true for SVRs but not trackers. Trackers cost more to fund than the bank are receiving in most cases so a write off of part of the debt in exchange for reducing their annual loss on the funding could be worth it if the write off does not exceed the future cost of funding deficits to the expected end of life of the mortgage (this is probably tricky to estimate as the ECB interest rate the trackers follow will not likely be as low as presently over the long term, some borrowers repay early in any event or will want to trade up or down triggering a new mortgage contract and funding costs may revert closer to ECB rates in the future should the banks ever convince markets they are stable again).
 
I took up the 10% deal from TSB a few years back and took 33K off our tracker.

I wrote to TSB last week asking them if they would be interested in doing a similar deal, they responded to my letter advising that there are no such offers at the moment but there may be in the future and customers who are eligible will be contacted.
The mentioned something about de-leveraging in the letter.
 
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