# Discount for tracker?



## Tom Doodle (20 Apr 2010)

I'm on a tracker with approx 5 years to go on my mortgage. At a push I could probably scrape together the funds to clear my mortgage although this would use up all our savings, kids college fund etc. What I want to know is, with all we hear about trackers actually costing banks money, would the bank be likely to offer me a discount on my outstanding mortgage if I were to pay them off early, thereby, in theory, saving them money.


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## cunninghams (20 Apr 2010)

absolutely Tom, an article on this very topic was in teh Indo on Sunday. Banks are offering people on trackers €1000 to leave as its costing them money. Definitely worth a pop


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## paddyd (21 Apr 2010)

Hi Tom,

I don't think theres anything to gain for either you or the bank to pay off the mortgage early

1. you'll never (ever) borrow money as cheap. 
2. your savings on deposit are probably earning a higher return than your tracker!
3. The bank top-load the interest to the start of the mortgage; if you have a 20 year mortgage, you can look back and see you would have paid the vast majority of the interest due in the first 10 years. Therefore the bank don't really care if you pay off early. They are not due any serious interst in the last 5 years of the term; its virtually all capital repayments
4. In not paying off your mortgage and keeping your savings, you are sand-bagging against the unknown happening. No matter how secure you are, theres still a recission going on. If you would be scraping together every penny to pay 5 years worth of mortgage, I'm guessing its not a massive sum, so its best to keep it.


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## Mixednuts (22 Apr 2010)

cunninghams said:


> absolutely Tom, an article on this very topic was in teh Indo on Sunday. Banks are offering people on trackers €1000 to leave as its costing them money. Definitely worth a pop




Under no circumstances sell your tracker for anything near €1000

If a bank is loosing money on a mortgage product imagine what it must be worth to you .


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