Redundancy advisors said to ask for a dicount on paying capital off mortgage

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gramlab

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Got laid off recently and as part of the redundancy package the were 1 to 1 sessions with a "qualified financial advisor"

During the session he said if we planned to pay a lump sum off the mortgage (which we do) then we should look for a minimum of 10% discount e.g. pay off 80K and look for 88K off the mortgage.

It didn't make sense to me that a bank would give a discount as they were making money off the 8K but the advisor insisted this should be the case.

So, I went into the bank last week and mortgage advisor said we were not the first to say this to her but it was nonsense that the bank would give any discount except for cases of arrears etc

Did I get really silly advice, and if so how did a "qualified" person who will be / and has given advice to well over 150 people get it so wrong???
 
Are you on a tracker mortgage with a foreign bank such Bank of Scotland?

If so it is possible that the bank could offer you a discount to "get rid of you" since if you stay on the tracker you are costing them money.

Therefore this could be very good advice and since you would lose nothing by asking the question I'd have no problem with it.

Marc
Chartered and Certified Financial Planner
 
There was no harm asking, PTSB had an offer previously similar to this. However as you found out not many banks are likely to be receptive to this.
 
gramlab said:
So, I went into the bank last week and mortgage advisor said we were not the first to say this to her but it was nonsense that the bank would give any discount except for cases of arrears etc

Did I get really silly advice, and if so how did a "qualified" person who will be / and has given advice to well over 150 people get it so wrong???
Click to expand...

No you didn't get silly advice, but it seems you were made to feel silly by a banker of all things. Bankers are just about the most caring, considerate helpful people I can think of with the customer's interest foremost?

Nah, don't think so. Branch staff are well aware of what the financial correctly advised you and are instructed to fob you off at every turn. Would you trust a banker to work in your best interest or in the banks. There is no trick in the book that bankers don't know when it comes to making money. Out of you.

Further to your situation, it does not always make sense to pay off a mortgage. If you want further advice on that you'll have to post more details.
 
Not on a tracker - just standard variable. To be honest going in to the bank was a bit of a waste of time. It was essentially - if you pay off this amount then your monthly drops by X amount. Already knew all that. It was the supposed discount that intrigued me.

Advisors take was that you are giving them a big lump of money and they should be more than glad to get it - hence the discount. Mortgage advisor basically laughed it off and said why would we give you money off a loan that we are making money on. Fair point I suppose.
 
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