Danske Bank offset mortgage - offered 30% discount to clear early

M

Motty1

Registered User
Messages
1
Recently I received an offer from Danske bank offering approx 30 % writeoff if I move away from them as they want to shut non corp banking. Should I accept as approx 60 k left on mortgage?
 
If that offer was made to me I would take it,pay down the remaining balance as quick as possible and be mortgage free forever.
 
Hi Motty

It looks like a good deal but we need more information to make sure.


1) Are you using the offset facility?
  1. For example, is €60k the balance without any credit set against it?
  2. Or is the real balance €200k with a deposit of €140k
2) How many years are left to maturity?
3) What is the interest rate? I presume it is a very cheap tracker
4) What is the value of the property?
5) Is it your home or an investment property?

Brendan
 
Indicative numbers:

Current payments: €60k on ECB+0.75% with ten years to go is: €520 a month
Future payments after write-down and new mortgage: €42k on 2.8% with ten years to go is: €400 a month

You can play with the numbers a bit but with ten years to go your minimum monthly saving will be €100. It also depends on the term remaining. The shorter the term the better the monthly saving is going to be.

There may be some hassle and legal costs associated with switching though, and for sub-€50k I've read that some banks aren't interested.
 
Last edited:
There is a lot of factors involved to work out if it's a good deal for you, if you have to borrow to make up the 30% and move from a tracker to a higher interest rate it's not so good of a deal. You also have to understand in 5/10 years time 500euro won't be what it's worth today.

Also there's no point using all savings to pay it and then next year you need to take out a car loan at 9% or a general loan at a high rate. So it depends a lot on if you have it disposable.

If you have high % loans I would pay them off quicker because it's such a small mortgage you have and savings to be made you could be losing money elsewhere so a lot depends on circumstances.
 
I have a tracker 0.5% above ECB with Dankse - pepper managing same. Given the opening post would it be work my while writing to see if they have anything on offer to close account. approx 55k remaining over 7 yrs.
 
niceoneted, are you sure your mortgage is still with Danske? I thought they had sold all their tracker mortgages and the offset ones were the only ones they've left.
 
llgon, it was sold off actually. I took it that it was an original Danske mortgage. I wasn't aware that they had held on to the offset mortgages. Thanks for the feedback.
 
Hi all.
I got my hopes up on this last week and rung pepper who were servicing danske loans at one stage.
They now own my 0.5% tracker and are offering no deals.
 
I also got this offer from Danske, I have a mortgage on my main residence split into two parts, an offset and 0.5% tracker (combined total approx 58K) . I have spoken to the guy taking care of this from Danske on two occasions. My understanding of the way it works is that everyone is offered a 20% discount on the total amount outstanding plus the amount of interest you would need to pay at a rate of 4% (I think that’s the rate he said) if you were to refinance the amount outstanding with another institution for the same period as ones current mortgage. Both of these combined in my case come to just over 18K, this equates to just owe 31% of the current outstanding amount.

I think this is a good deal and I most likely will take up the offer. I’m fortunate to be in a position of not needing to refinance.
Is there any obvious pitfalls that I should be aware of ????
 
Hi trader

It sounds like a great deal.

The only pitfall is whether the offset mortgage has some good value for you.

You say that the combined balance is €58k. But could you draw down another €100k if you needed it?

But if you don't need it, then the offset mortgage is of little value to you.

Brendan
 
Motty1 said:
Recently I received an offer from Danske bank offering approx 30 % writeoff if I move away from them as they want to shut non corp banking. Should I accept as approx 60 k left on mortgage?
Click to expand...

Do you have any further information (or a link).

I had an offset mortgage with Danske but the servicing was moved to Pepper (and I think they may have bought the mortgages - not sure). But banking was closed and I had to move my account. So there was no way an offset could work - so I'm surprised that you still had that facility.

I don't believe I received any similar offer (I would grab it btw). So if there was any information I would be very interested
 
Is it right to say that this option is only open customers who had offset mortgages therefore held onto by Dansk?
Therefore not covering the standard ECB trackers that were sold to Pepper finance.
It looks like a fantastic deal a person's circumstances are right.
 
yoyo21 said:
Is it right to say that this option is only open customers who had offset mortgages therefore held onto by Dansk?
Click to expand...

It's not "open" to anyone. Danske appears to have offered it selectively to people.

And Pepper have no similar deal. But you could ask them.

brendan
 
llgon said:
I believe Danske have offered it to all their mortgage holders. The OP has said they want to shut non-corporate banking.
Click to expand...
From what I can see is it depends on what type of mortgage you originally drew a standard ECB tracker (which were sold to Pepper so no offer) or the offset mortgage which are still owned by Dansk (they are the ones Dansk wish to close).

Does anyone have any thoughts or confirmation on that, it would be appreciated?
 
yoyo

This is an offer from Danske. It is not an offer from Pepper.

That is like saying - "AIB is offering a fixed rate of 2% to home owners but my buy to let mortgage is with Bank of Ireland. Will they offer it to me?"

Brendan
 
I can't confirm what you say but as far as I know that is the case, as I said in a previous post:

llgon said:
niceoneted, are you sure your mortgage is still with Danske? I thought they had sold all their tracker mortgages and the offset ones were the only ones they've left.
Click to expand...

As Brendan said this only applies to somebody who currently has a mortgage with Danske, there are not many around.
 
You must log in or register to reply here.
Back
Top