Cashback mortgage and breakage.

Alancillhill

Hi there, Just looking for the answer to a simple question,

We received about 6-7k in cashback for a 3 year fixed mortgage, first time buyers. I am considering breakage and going on a longer term fixed rate with another bank. Are we liable to give back the cashback money or is that divorced from the contract ? I know there will be a breakage fee.

I don't see it in the details, I want to know before I talk to the bank themselves.

Thanks !

A

Henry Ford III

I'm not sure how anyone here can answer your query.

It depends totally on the terms and conditions of your contract.

Tabby McTat

AFAIK the bank is not allowed claw back the cash-back money.

The fixed rate breakage cost is different but this might be pretty low for you given the rising interest rate environment.

Q&A

I enquired about this when I took out my mortgage.. The lender send there was nothing they could do. No clawback allowed by the central bank. That's why you see some banks offering 3% (2% on drawdown and 1% after 5 years). All aimed at try to keep you in the hook.

Just be careful most lenders require you to be with your current mortgage provider for a set period before they'll consider you for a switch.

L1011

Cashback has been non returnable for some time now.

Some (I suspect low single digits of "some", though) people arranged to cycle a mortgage through the banks (by finding a cheap and willing solicitor) to get the full set of cashbacks back ~18 months ago when there were decent offers. Arrange all the mortgages in advance so they are looking at the original one for length of time holding it.

Probably far too much effort for the reward really!

Jim2007

https://www.boards.ie/discussion/comment/119114769#Comment_119114769

It is important to take note of the warning here. Like every other business, banks are not obliged to do business with you. If you are a serial switcher you will eventually reach this point. I don’t think it was here, most likely on askaboutmoney, there were a few reports of people who ended up in this situation.

Alancillhill

Thanks for all the replies,

I suspect the other banks would want our business as we have no interest in hopping around the place, we were just thinking of going for a 10 year + fixed rate, to do one switch. Current provider doesn't do them.

Only thing is we are not too long in new house, so bank accounts have a lot of spending (for getting set up) ; That's another hurdle.