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Mortgage Savings

  • 12-06-2011 11:42am
    #1
    Feelgood
    Registered Users, Registered Users 2 Posts: 2,191 ✭✭✭


    Hi folks,

    I heard some rumours regarding mortgages and was wondering if there is
    any truth behind them and if someone could explain how it works.

    Firstly, due to the way the banks adjust their interest rates, by paying the mortgage either weekly
    or bi-weekly apparently you will save in the region of 12k over the lifetime of a 25 year/200k mortgage?.
    Is this true and how does it work exactly?.

    Secondly, I heard that you can knock about 20-30k off your mortgage by negotiating
    with your lender to come off a tracker mortgage?. Is this true and what is the downside to
    doing this?.

    Many thanks for an info :)


Comments

  • #2
    harry21
    Registered Users, Registered Users 2 Posts: 519 ✭✭✭harry21


    Paying weekly will save you money in the long run because you will be subject to less interest.

    Take one month. the interest compounds for 4 weeks and then you pay your mortgage made up of the capital and the interest. If you pay weekly, the interest only compounds for the week, thus saving you money.:)

    The banks calculate interest daily far as I know, so if one could pay daily that wouldbe the ideal situation.:D

    As for the renegotiating with the bank for a change in terms..... You'll have to wait for more replies. I don't know how sucessful you would be.:(


  • #3
    tommyboy2222
    Closed Accounts Posts: 914 ✭✭✭tommyboy2222


    1) Think this was a mistake by the journalist who wrote that article.

    http://www.irishtimes.com/blogs/pricewatch/2011/04/05/i-made-a-mistake/



    2) As tracker mortgages are loss making for banks, they are eager to get people off them. The tracker rate is about 1 % above the ECB rate which currently is extremely low.

    The downside of coming off a tracker rate is that you would have the option of much higher fixed or variable rates. And banks can raise their variable rate whenever they want.


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