ptsb to offer 2% cash back to new customers

Sarenco said:
It may not be in their long term interests but you can't really criticise banks for offering products that people apparently want.
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I don't think it's quite as simple as that. We have only 5 banks, so they can make sure that they don't compete too much with each other. One way of doing this is to confuse customers. Make products difficult to compare. Pay mortgage brokers a big commission to encourage them to steer the borrower to the worst product - which a lot of them do with KBC.

I agree that preventing bank failure is their primary role. But protecting vulnerable customers who cannot be expected to understand how mortgages work should run that primary role a close second. At the moment, the Central Bank is protecting the banks by publishing misleading information on mortgage rates here compared to the Eurozone. The CB is doing everything in its power to boost the profitability and capital of the Irish banks at the expense of mortgage holders.

Brendan
 
.5% discount for 1 year, and 2% cashback upfront with a 5 year clawback. Am I right in calculating that as a 0.5% discount over 5 years?
 
I don't see anything wrong with this offer, as long as the mortgage holder plays them at their own game. Take the discount. Take the cashback. Hold on to the mortgage for the min time agreed on their T&C's and then shop around for a better deal with one of the other banks.

This is no different from what the electricity/gas companies and the health insurance companies do to attract new business. And nobody asks them to ban their introductory offers and offer a flat rate.
 
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5 years is a long time to be stuck with the same electricity/gas or health insurance company and the amount of money involved is far smaller then with a mortgage.

It needs to be spelled out in clear simple english what its going to cost the consumer.

It it equates to a 5 year fixed deal, sell it as such, don't confuse it with gimmicks.
 
todo said:
It it equates to a 5 year fixed deal
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No it doesn't.

A borrower is entitled, by law, to prepay a variable rate home loan at any time of their choosing without any redemption fee. A borrower may prepay the home loan out of their own resources or by refinancing with another lender.

If a borrower has availed of the 2% cashback offer, then PTSB reserves the right to seek refund of payment of the cashback if the mortgage is redeemed in full within 5 years. However, there is absolutely nothing stopping a borrower refinancing the loan with another lender and paying PTSB back the 2% cashback offer within the 5 year period and it may well make sense to do so if the deal on offer from another lender is sufficiently attractive.

Here's a link to the details of the PTSB offer:

https://www.permanenttsb.ie/whatweo...gage/2-percent-cashback-terms-and-conditions/
 
Here is the relevant condition:

  1. The Bank reserves the right to seek refund of payment of the cashback if mortgage is redeemed in full within 5 years. The loan applicant must return such sum immediately to Permanent tsb.
 
Hi all
I wanted to write on the 2% "refund" offered by some lenders at present which is a very costly "refund" over the term of the loan.
Take a 300k loan with and without "refund" and the cost differences between both
300,000 @4% over 25 years cost per month is 1,583.51. Total cost of loan over 25 years is 475,053 with the interest bill at 175,053 (a staggering amount of money in itself)
300,000 less an immediate payment of 6000 (2% Refund) 294,000 @4% over 25 years cost per month 1,551.84. (Difference 31.67 per month) Total cost of loan over 25 years is 465,552 with an interest bill at 171,552.
I would prefer if these lenders simply reduced their interest rates rather than attempting this "Refund" lark which is only going to cost the customer, yet again, (who does not pay it off the loan amount immediately). Beware is all I am suggesting and know the full impact of this so called "Refund".
Padraic
 
how can you calculate what the cashback is worth?

say 300K loan over 25 years @ 4% - repayment is 1583.51 per month
they give you 6K up front (let's assume you spend it on furniture) - that equates for €4 per month for the lifetime of the loan, which is equivalent to a 0.024% discount on the interest rate.

or you pay it off the loan immediately and they recalculate the loan repayment to 1551.84, that's equivalent to a 0.192 discount

or you pay it off the loan and leave the repayments the same, now your loan is paid off a year early

which is the correct way to approach it?
 

The lending environment from a mortgage perspective is going to be significantly different in 5 years. With this in mind, I would always assume that I'll DEFINATELY be remortgaging to another lender at that time.

The minimum term to be allowed to keep the 2% cashback is 5 years and there's nothing to stop a bank from 'hooking' customers in with the cashback offer and hiking variable rates in 2-3 years - knowing that customers will stay for the 5 year term.

Therefore, in determining whether the offer is a good one, I'd only select a 5 year fixed rate product and view the 2% cashback as a 0.4% discount over the 5 years.

However, I'm a little bit skeptical that PTSB have removed their 5-year fixed rate offering entirely and only allow you to select a 3-year fixed rate. If they drum up a lot of business under this offer, they'll be in no hurry to reduce rates during years 4 and 5 of your minimum term to get away with no clawback of the cashback.

Bank of Ireland, on the other hand, continue to offer 5-year fixed rates at 3.8% with 2% cashback. I'd view this as a 5-year fixed rate of 3.4%.
 
I think it is worth taking the cash upfront, and after the minimum period (assume 5 years) switching to a lower variable rate with another provider.

Example - Assumptions
PP 567,000
Mortgage 475,000
LTV 80%-90%
Variable Rate

EBS (APR 3.8%) Monthly Repayments 2,020
PTSB (APR 4.28%) Monthly Repayments 2,160

Difference 142 month * 12 months = 1,704 per year.
After 5 years you will have paid 8,500 more on your mortgage with PTSB than EBS.
However you will have received 2% of your mortgage upfront as cash = 9,500
After the 5 years you can move to EBS (or whoever has a lower rate at the time). IF you don't move after the 5 years it will ultimately cost you in the long term.

Therefore you will have
1) Got 9,500 cash up front
2) It will only have cost you 8,500

Am I missing something?
 
What about the fact that Santander, Frank, etc may have driven variable rates down to 2.5%, but only for new borrowers?
 
I may be wrong, but isn't the cash back also to cover solicitor fees during the transfer?

Also, for someone that wants to change to a lower LTV, there is competition to attract with a cash offer... As you cannot change your LTV interest rate with your current provider, changing bank is the only way. Hence the 2000 cash back is an attractive offer.
 
I remortgaged my house with PTSB recently for 10% of the market value of the house . It is a new mortgage. It is not a top up loan or home improvement loan (which has a different interest rate). Initially the branch manager said (in an email) that I was eligible for the 2% cash back. However the 2% cash back was subsequently refused by the head office. I was told that it was because my mortgage was for home improvements. I argued that it was not their home improvement loan package that it was a new mortgage but no joy. I decided to go ahead and take the loan as I did not want to start over with another bank.

I have read their terms and conditions again and still believe that I qualify for the 2% cashback. Does anyone have an opinion on this and how could I pursue PTSB to honour their own offer. Thanks.
 
Hi Sarenco, I felt I had a case. I had done a lot of paperwork and incurred expense in the belief and with written confirmation that I would get the 2%. They took it off the table at the last minute.



Once I had the mortgage I lodged a complaint to customer service who offered me a good will gesture of 200. I went to obudsman and ptsb then offered me 400. I refused this. I was finally given the full 2%. I have no time for companies that advertise special offers to get one in the door and then do their best to not follow through. I think they rely on people not having the time or doggedness to chase them on it. It was worth the effort on my part but should not have been nessesary. Any one in a similar situation should take note get things in writing and don't let them away with it!
 
kateLaila said:
I was finally given the full 2%.
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Congratulations.

Was this pursuant to an award by the FSO or a good will gesture on the part of PTSB?

I agree that it is very frustrating when somebody pulls an offer at the last minute. But on the other hand, you decided to proceed regardless...
 
P TSB is a bank id never bank with again if i wasnt as stupid as I was when getting mortgage.

I think personally AIB are the only bank making any effort and they seem to be performing well too so im trying to get switched to them...may hv to wait 5 years though!
 
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