TSB - Tracker Offer

fred252

is this mutually beneficial?

i find it hard to believe that the bank would propose anything that doesn't have a net upside for them. i guess there are certain customers who this will be a good deal for but i guess tsb are relying on a lot of customers taking up this offer when it might not really be in the customers best interest...

ei.sdraob

this here?

fred252

yep

the independents review is a bit more detailed, http://www.independent.ie/business/personal-finance/property-mortgages/mortgage-holders-to-get-10pc-bonus-for-paying-lump-sum-off-trackers-2622209.html

bamboozle

fred252 wrote: »

is this mutually beneficial?

i find it hard to believe that the bank would propose anything that doesn't have a net upside for them. i guess there are certain customers who this will be a good deal for but i guess tsb are relying on a lot of customers taking up this offer when it might not really be in the customers best interest...

the net upside for the bank is that this scheme will see capital inflow into the bank while reducing their exposure to loss making tracker mortgages, PTSB the have to raise something like 5 billion over the coming months, they are planning on selling some of their UK business for around 2 billion, then through this scheme of encouraging people to pay extra on their trackers this could raise further capital.

astrofool

The mortgages themselves are worth a lot less to the bank (what's the average writedown these days? 70%?), this enables them to reduce the amount of debt on the loan book, without much of a hit.

It also reduces the future monthly payments of the borrower, making them more likely to be able to pay it back.

Of course, I'd be happy to be able to buy my mortgage on the open market at the average writedown rate

dan_d

I think this is a case of short term expenditure for long term gain on the part of the banks. A notion that appears to be completely alien to quite a few parts of Irish society.

In the long run, the banks benefit from this. Course the mortgage payers do too, but I'd imagine that's a secondary benefit in the bank's eyes.

Interesting offer; at least there's somebody in there using the head.

hinault

PTSB's offer is a step in the right direction but it's not enough.
Giving PTSB €5,000 and their paying €500.00 off a mortgage isn't exactly overly generous.

On the other hand, PTSB probably have little room to manoeuvre.

Wait until the ECB rates increase further and let's see if the banks will increase their offer.

dan_d

Have to say, it's probably one of the disadvantages of having a mortgage with a UK bank.

Irish banks may jump on this bandwagon, but it's unlikely the UK banks will (I think).

sfk

Does any one have a view on whether the other irish banks will offer an incentive to pay down your tracker mortgage early and if they do would selling your house and using proceeds to pay down the tracker entitle you to bonus?

spank_inferno

sfk wrote: »

Does any one have a view on whether the other irish banks will offer an incentive to pay down your tracker mortgage early and if they do would selling your house and using proceeds to pay down the tracker entitle you to bonus?

I guess it will depend in the circumstances of the institution themselves.

PTSB is in dire straits, however EBS are in a much better state, so though trackers are a chain around their neck, they may delay similar action to see how the PTSB customer base react to the offer.

later12

fred252 wrote: »

is this mutually beneficial?

Yes.

I would add one caveat, it is only mutually beneficial if the borrower actually has the money to meet his other obligations over the coming year and can afford to hold what would appear to be significant sums of money in savings over that time.

Unfortunately, I think some will inevitably rush into this without adequately examining their projected income and expenditure out of desperation to jump on the scheme, and then run into financial difficulty later in the year. In the current environment, more than ever, one should thoroughly examine the viability of participating in such a scheme, including assessing job security. The bank will not be doing this for you this time around. Participation would likely negatively impact upon any potential welfare payments and mortgage assistance.

Yes other Irish banks are extremely likely to follow suit on this, likely to be on very similar terms.

phkk

sfk wrote: »

Does any one have a view on whether the other irish banks will offer an incentive to pay down your tracker mortgage early and if they do would selling your house and using proceeds to pay down the tracker entitle you to bonus?

Well,have any of the other banks announced any offers similar to this?