You May Pay Off Your Mortgage Early!
Discussion
What do you all think of this?
I arrive home on my bike, soaked to the skin. I am feeling so sorry for myself, so depressed.
Waiting for me is a letter from the bank, saying congratulations, that as I have been a loyal customer, they are now allowing me to pay off the remainder of my 10 year / 1% fixed rate early, WITH NO PENALTY
This literally made me laugh out loud.
So what should I do? There is a phone number, so I am thinking of asking them to split the profits of terminating early.
But what a cheek.
I arrive home on my bike, soaked to the skin. I am feeling so sorry for myself, so depressed.
Waiting for me is a letter from the bank, saying congratulations, that as I have been a loyal customer, they are now allowing me to pay off the remainder of my 10 year / 1% fixed rate early, WITH NO PENALTY
This literally made me laugh out loud.
So what should I do? There is a phone number, so I am thinking of asking them to split the profits of terminating early.
But what a cheek.
TwigtheWonderkid said:
Do this. You paying it off will allow them to lend it out at a much hight rate. So ask them how much they will knock off your settlement figure to pay it off.
Does this kind of “discounted settlement” ever happen? I’m with a mainstream lender and not quite as good a deal as OP (congrats!) but would be interested in knowing if there was such a thing!How charitable of them 
You can obviously make more from savings interest and TBH unless they make you an offer that's hard to refuse, having the cash in readily accessible form is much preferred to it being locked in equity, unless you particularly want the safety net of zero mortgage.
You can obviously make more from savings interest and TBH unless they make you an offer that's hard to refuse, having the cash in readily accessible form is much preferred to it being locked in equity, unless you particularly want the safety net of zero mortgage.
CarDoodle said:
TwigtheWonderkid said:
Do this. You paying it off will allow them to lend it out at a much hight rate. So ask them how much they will knock off your settlement figure to pay it off.
Does this kind of “discounted settlement” ever happen? I’m with a mainstream lender and not quite as good a deal as OP (congrats!) but would be interested in knowing if there was such a thing!Nonetheless it still pains me when I think I paid an early repayment fee on a 0.95% fix to move house!
Caddyshack said:
There was talk during the credit crunch of lenders gearing up to buy back mortgages with a £10k incentive but I never actually heard of any happening. I am a broker and had a big client bank of people with £1m+ mortgage very close to or even under base.
I know someone who in 2007 had a c£1m mortgage at base+0.1%, for the life of the term. Bank offered him £10k, he calculated the fair value was well over £100k. Around 2008 we took out a discount tracker mortgage. When rates gradually fell if I recall there was no cap (I think there now specify a minimum). Our rate therefore ended up close to 0% and we got continuous letters to redeem early with removal of any fees. Unfortunately it wasn't portable and we lost it when we moved. If on that low rate unless they properly incentivise I'd stay with it.
CarDoodle said:
Does this kind of “discounted settlement” ever happen? I’m with a mainstream lender and not quite as good a deal as OP (congrats!) but would be interested in knowing if there was such a thing!
Yes, in the past it has been used to encourage high ltv customers to make discounted lump payments to bring their ltvs down.scot_aln said:
Around 2008 we took out a discount tracker mortgage. When rates gradually fell if I recall there was no cap (I think there now specify a minimum). Our rate therefore ended up close to 0% and we got continuous letters to redeem early with removal of any fees. Unfortunately it wasn't portable and we lost it when we moved. If on that low rate unless they properly incentivise I'd stay with it.
Very unusual for a mortgage not to be portableCaddyshack said:
There was talk during the credit crunch of lenders gearing up to buy back mortgages with a £10k incentive but I never actually heard of any happening. I am a broker and had a big client bank of people with £1m+ mortgage very close to or even under base.
They can have mine tomorrow for £10k 
BoRED S2upid said:
Caddyshack said:
There was talk during the credit crunch of lenders gearing up to buy back mortgages with a £10k incentive but I never actually heard of any happening. I am a broker and had a big client bank of people with £1m+ mortgage very close to or even under base.
They can have mine tomorrow for £10k scot_aln said:
Around 2008 we took out a discount tracker mortgage. When rates gradually fell if I recall there was no cap (I think there now specify a minimum). Our rate therefore ended up close to 0%
Snap. In 2007 I moved to our current bigger house and took out a 0.23% above BoE base rate tracker mortgage for £147k. Initially payments were around £700-800/month but very soon started plummeting and settled at less than 0.5%. I even started overpaying just to 'do something' with the spare money I had, even though I might have got a better return on that money elsewhere, but it felt like almost every penny was going towards paying off the capital.The current interest rate rises have shoved those payments northwards to about £600/month but thanks to the overpayments I only have about 3yrs left on it. That house move and mortgage find was probably the single best financial decision I have, and will ever make.
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