# How much to offer BoS to clear a tracker mortgage?



## onekeano (18 Jan 2012)

A friend of mine has a small tracker mortgage (c.40k) with Bank of Scotland (Certus). He can afford to a) pay it off in full or b) invest in the National Solidarity Bond. There are 16 years left on the tracker so I'm thinking that Certus should be very keen to get this off their books but the question is what kind of incentive are they likely to offer?

Any advice / suggestions would be appreciated.

Roy


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## Brendan Burgess (18 Jan 2012)

The best thing for him to do is to contact Certus and make an offer of 80%. I expect that they will decline it but they might come back with a counter-offer.

Brendan


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## LDFerguson (18 Jan 2012)

Despite the obvious advantages for them, there's very little evidence that any lenders are actually offering discounts for tracker buy-outs.  I'm aware of Bank of Scotland / Certus accepting haircuts on distressed loans where there's little hope of the repayments being made, but not on performing loans.  See this thread.

But as Brendan says, it's worth a try.  If the discount offered is small and his tracker rate is good, he needs to do the maths to consider would he be better off leaving his cash earning a good rate of interest - sometimes the interest less DIRT tax can work out greater than the interest on the mortgage.  Other factors need to be considered too, e.g. counterparty risk on deposit.


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## onekeano (19 Jan 2012)

Thanks guys.... I've passed on the feedback and will let you know how he gets on, don't think he would have the b*lls to stop paying as a negotiation tactic so that probably puts him at a disadvantage in terms of negotiation.

Roy


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## Bronte (20 Jan 2012)

onekeano said:


> don't think he would have the b*lls to stop paying as a negotiation tactic so that probably puts him at a disadvantage in terms of negotiation.


 
That's an interesting mindset.


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