Hi cork south
You should read these two key posts on the issue before making any decision
PTSB mortgage holders to get 10% bonus
What is a fair price for paying off a tracker early?
You are almost a perfect case for taking advantage of this offer
It is more attractive if...
You haven't long to go on your mortgage.
You expect to be paying off your mortgage anyway, because you expect to move.
You are in negative equity and you want to eliminate it as quickly as possible
You are worried about the safety of your deposit
You have only 12 years to go on your tracker
You are thinking of moving
You are worried about the safety of your deposit
And you don't have a particularly cheap tracker anyway.
You meet none of the criteria for it being less attractive.
This is screamingly good value for you. The only reason you might not go for it is if you think that a better offer comes along.
You can pay almost €60k off this tracker and you should do so immediately.
I think that almost every reason given by paddyd is wrong or irrelevant
you will never in your lifetime borrow money so cheaply again.
This is just irrelevant. You will not be borrowing money again anyway except when you trade up. So you will have to cash in your tracker anyway when you trade up.
Considering there is a recession going on, I'd suggest sand-bagging your savings just in case you ever need them for anything else.
You have given no indication at all that your income is in jeopardy. You have saved a lot of money and paid a lot of money off your mortgage, so you are obviously good savers.
If mortgage interest rates rise significantly and you still don't have a home for that money, thats the time to pay down the mortgage.
If the ECB rate rises, deposit rates will probably rise in line with mortgage rates.
As you only have 135k left on your mortgage and 12.5 years, then you've already paid the bank the substantial majority of the mortgage interest, you're paying mainly the capital now - which makes the case that it may be too late to really get a decent advantage from a 20k one-off payment.
I don't understand this and I think it's irrelevant. You have to leave the repayment level fixed to qualify for the 10% credit, so you will be paying more capital afterwards. I have addressed this issue in
this post.
and finally, I agree that 22k in return for 20k from TSB is TERRIBLE. I've seen calculations in the Indo recently suggesting a bank would need to pay 45-50% of your contribution for it to be attractive - thats 28-30k in your case.
I didn't see them but if that is what they said, they were nonsense. I set out my calculations in the posts above and it is worth around 4% for a borrower on an ECB + 1% tracker with 20 years to go. Depending on the assumptions, it is worth around 25% to the bank. In your case, I would say that this deal would break even for PTSB and is a huge winner for you.
My guess is that PTSB will get most of their acceptances from people like you for which the deal is the steal of the century and it will not be much use to PTSB. They may issue a more targeted deal later which ties in the bonus to the rate and time left on the mortgage. I would guess that if the deal is changed, it would pay less than 10% to people like you.
and finally finally, 22k off 135k outstanding is only about 15% which would cut maybe 1.5 years off the remaining term.
It actually cuts around 3 years off your mortgage, but that is irrelevant.
if you don't need to, I'd hold off. if interest rates rise by 2% or more, then perhaps even pay off 40 or 60k and make a real hole in your mortgage
It makes more sense to pay off 60k now and get 66k credit, than pay off 60k and get 60k off your mortgage in a few years.
