Firstly, this may be better in the banking forum so mods let me know,.
Second, I am not asking for financial advice here - just wondering if anybody can clarify how this would work.
It is well documented that tracker mortgages are losing banks money and so they are quite likely to give you a discount on your outstanding balance of 40,000 (for example) - lets say they accept 30,000 in a lump sum to completely wipe the debt.
However, in the situation where the mortgage is at a variable rate...is there any advantage to the bank to provide a discount on a lump sum repayment? In the above example where there is an outstanding balance of 40k but on a variable rate, would there be any advantage to the bank in accepting a lump sum figure of less than 40k to wipe this debt clean?