Just wondering about the validity of an idea I had.
I have a tracker mortgage at 0.75% above the ECB rate, there is still 23 years left in the mortgage and I owe 150k.
As I calculate it that will mean me paying around 32k in interest over the 23 years.
If the bank are financing that money at 3% (assuming this is roughly their financing cost) that will cost them around 58k in interest.
This leave a net cost to the bank of 26k by the time I've paid my mortgage back.
Now I have savings of around 120k but I'm keeping those in savings accounts for the time being because the interest I can earn on even a standard deposit account is over 3% leaving my with a net profit by not paying back my mortgage.
My question is how do you think the bank would react if I was to approach them with the proposal of paying off my mortgage (rather than keep it in savings) if there were willing to knock 20k+ off the amount I had to pay based on the saving they would be making by getting my tracker mortgage off their books.
Now I know there are a lot of assumptions above, the ECB rate will most likely go up, interbank costs will over time go down.
If someone works in a bank I'd like to know what is their feeling on this? Do they think a bank wold consider this proposal, or perhaps laugh it out the door?
I have a tracker mortgage at 0.75% above the ECB rate, there is still 23 years left in the mortgage and I owe 150k.
As I calculate it that will mean me paying around 32k in interest over the 23 years.
If the bank are financing that money at 3% (assuming this is roughly their financing cost) that will cost them around 58k in interest.
This leave a net cost to the bank of 26k by the time I've paid my mortgage back.
Now I have savings of around 120k but I'm keeping those in savings accounts for the time being because the interest I can earn on even a standard deposit account is over 3% leaving my with a net profit by not paying back my mortgage.
My question is how do you think the bank would react if I was to approach them with the proposal of paying off my mortgage (rather than keep it in savings) if there were willing to knock 20k+ off the amount I had to pay based on the saving they would be making by getting my tracker mortgage off their books.
Now I know there are a lot of assumptions above, the ECB rate will most likely go up, interbank costs will over time go down.
If someone works in a bank I'd like to know what is their feeling on this? Do they think a bank wold consider this proposal, or perhaps laugh it out the door?