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Bank likely to offer mortgage deal on large lump sum repayment?

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  • 17-06-2014 4:14pm
    #1
    Josey Wales
    Registered Users Posts: 4,432 ✭✭✭


    Hi,

    We have a mortgage with Ulster Bank and are in a position to give them a lump sum to reduce the capital balance. We currently owe 300K and were thinking of paying off a little over 1/3 of that.

    My question is whether or not banks are inclined to offer some sort of discount on the early repayment of a mortgage? We aren't in arrears and are on a standard variable rate so I'm guess that the answer would be that there is no incentive for the bank to offer any kind of deal.

    Thanks.


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    #2
    coylemj
    Registered Users Posts: 25,346 ✭✭✭✭coylemj


    Josey Wales wrote: »
    We aren't in arrears and are on a standard variable rate so I'm guess that the answer would be that there is no incentive for the bank to offer any kind of deal.

    Correct, they have no incentive whatsoever for the simple reason that they don't want you to pay the loan off early.


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    #3
    Silpac
    Registered Users Posts: 51 ✭✭Silpac


    your the last account they want an early repayment for. Still not a bad idea if its totally surplus and your paying a variable rate ie you will not earn an equivalent amount on deposit.


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    #4
    Nervous Wreck
    Closed Accounts Posts: 16,115 ✭✭✭✭Nervous Wreck


    If you make a lump payment like that, they're already losing out on the interest they would otherwise have charged you on that 100k (provided you reduce the term, rather than the repayments) so they're not gonna offer you anything else. That said, not paying interest on that 100k is huge incentive as is.


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