Has anyone negotiated a discount to exit a cheap tracker?

G

galleryman

Registered User
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168
Hi,

I am on a 0.6% above ECB tracker mortgage with 17yrs left to run on it and a substantial amount still to pay off.

As circumstances would have it I plan to emigrate and so will either sell my house OR rent it out depending on what I can get for the house.
The offers on teh property so far are not as desirable as I would like but a decent hair cut on my mortgage by the bank would compensate and enable me to sell and pay off the mortgage.
This provides an opportunity to negotiate with my bank that they buy me out of my tracker.

I'm with AIB
Any advice on how to go about this and who to deal with etc?
What to tell them and what not to divulge at this point in time?
how much to look for as reasonable compensation for getting a .6% tracker off their books?.

An Article in today's Indo suggested a tracker holder in my situation should be looking for 20- 25% of an incentive. That would make up for the lousy offers on the house.

thanks for any suggestions or opinion.
 
Hi GaleryMan

If you sell your house, you have to pay off your mortgage.

If you rent out your house, you will be changing the terms of your mortgage and they may be entitled to withdraw the tracker and put you on the RIP mortgage rate.

I suspect that the banks are factoring this into their decisions not to offer realistic break figures for mortgages. When mortgages were issues for 20 years, they used to last aroun 7 years on average. I suspect it's longer now, but it might not be that much longer.

I would suggest that you approach your bank and offer to switch to a standard variable rate and see what they say. you can then pay that off whenever you want.

Brendan
 
From the long running, Can banks wriggle out of trackers thread this is my calculation of the offer you'd be made.

I reckon if you've had the mortgage more than 7 years they may offer you 2% of the principle at most.


jinx9000 said:
the article mentions 25% "to make it worth their while".
that advice stands as good!
Click to expand...

 
galleryman said:
An Article in today's Indo suggested a tracker holder in my situation should be looking for 20- 25% of an incentive. That would make up for the lousy offers on the house.

thanks for any suggestions or opinion.
Click to expand...

This is the article I believe [broken link removed]
 
Hi Brendan,

that's a splendid suggestion.

Thanks


As I will need my solicitor for this in any event, is it worth getting him involved in the negotiation of any possible discount?



Brendan Burgess said:
I would suggest that you approach your bank and offer to switch to a standard variable rate and see what they say. you can then pay that off whenever you want.

Brendan
Click to expand...
 
Do you not think the lender would insert a clause that if the mortgage is paid off early that they would require a return of some of their rebate.

I could pay off my reasonable size tracker sum immediately if they would reduce the amount but this would not be a profitable senario for the lender.
 
Discount for paying off tracker mortgage early?

Hi There,

Banks are losing significant monies on tracker mortgages, and they need to increase capital reserves or reduce the total value of their lendings.

Has anybody tried to negotiate a discount on their mortgage with their bank in return for paying off the mortgage in full?

Sean.
 
Bank of Scotland were offering people €1,500 to switch to another lender.

Has anyone tried to get a bigger discount from them?
 
I currently have a tracker +0.95% with AIB and asked them about getting a discount to settle the mortgage.

Was basically told there is no way a bank would offer you a reduction, no matter how small, to end the mortgage early. Can of worms, how would it be calculated etc were a few things mentioned to me, so I too would be very interested to actually here of concrete examples where banks have offered reductions in capital amount to end/lose tracker.
 
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