NIB Offset Mortgage

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pennypincher

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I have an Offset mortgage which does not charge me mortgage interest on the cash I have in my current account.A friend has advised me to use my credit cards to max out my cash withdrawal limit(10k),leave it in my account for 3-3.5 weeks,then pay back money owed to credit card company before end of month.Keep doing this every month and it will save me 000's over the 20 year term....essentially I won't be paying 3.19% on this cash(10k) for 20 years etc.Where's the catch?
 
Don't take financial advice from this friend. You'll be paying interest to the credit card company from the day on which you withdraw the money to the day you repay it. There is no free credit period for cash withdrawals. The interest on your credit card will outweigh any savings on your mortgage.

Is there a chance that you'd qualify for NIB's tracker mortgage (2.79% interest, €100k minimum, 60% LTV max) which could be better in the long run than the offset mortgage?
 
However, could you not be clever and use your credit card for purchases as much as possible during the month and then pay it off just before it's due?

You would need great discipline though to ensure that you don't run into debt or a situation where you are paying interest.
 
I have an AIB Visa card - pay the bill in full each month - and have never been charged interest on cash withdrawals?!
 
my2leftfeet said:
I have an AIB Visa card - pay the bill in full each month - and have never been charged interest on cash withdrawals?!
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Cash withdrawals (from an account in credit) or cash advances? I would be very surprised if they were offering the latter for free.
 
Cash advances. Just to clarify - there is a transaction charge of a couple of Euro - but I have never paid interest on my Visa.
 
Strange - Apart from the cash advance fees I thought that cash advances also attracted immediate interest charges on most or all cards?
 
AIB cash advances should attract interest immediately. That's why they quote a different APR for cash advances than regular payments!

my2leftfeet, are you sure your account wasn't in credit when you withdrew the cash? If not, maybe AIB only calculate interest when you fail to pay off the full balance each month, i.e. there's a bug in their software.
 
Just Checked with AIB Credit Card and other than the Cash advance fee once you pay the money off by the statement due date there's no interest charged...so it's a runner!
 
I really didn't believe that it was possible to get cash withdrawals interest-free for any period, but it looks like I was quite wrong. I've been checking the IFSRA site. I'm having trouble accessing some of the .pdf files, but if I use the Google 'view as html' option to read their latest credit card survey ([broken link removed], it shows on Page 2 that a pile of providers (AIB, Amex, BOI, Barclays) all allow 56-days interest free on cash withdrawals. This point is called out again in one of the IFSRA guides (www.ifsra.ie/data/cr_pub_files/Personal loans and credit large print.pdf) where it says that;

What is the interest-free period?You will not be charged any interest if you pay your full bill within a set number of days, called the interest-free period. The number of days varies with eachcredit card provider. Some providers also allow an interest-free period on cash withdrawals
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Note however that the [broken link removed] does refer to a 1.5% fee for cash advance.

Amazing what you learn on AAM!
 
That is incredible-what looked like a dud has turned out to be a great loophole-how long before they close it!

I owe 97k on my mortgage @ 3.05% (19 years remaining), I have 1 card with AIB with a €10k limit-how much could I save with ths does anyone care to calculate?
 
Whoa there cowboy - hold on & run the numbers. AIB are charging you 1.5% for a maximum of 56 days free credit on this money. Wouldn't this equate to something like 9% apr? Whereas you are gonna save 3% apr approx on your mortgage?
 
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