Can I make a settlement offer to the Mortgage Company?

Earlier in the year, my savings equalled my remaining mortgage balance.

I owe the bank £150k. My mortgage is BoE rate + 0.17% interest only. This is £52 a month. I make about £150 interest a month on this £150k via ISAs etc.

I earlier this month inherited some other money, so I don't need a 'safety net'.

I must be costing the bank a fortune. Can I make the mortgage company an offer, say £145k to clear the debt?

Replies

  • Doubt it, they have a contract and when you phone up, the chance of getting hold of someone who can make such a decision is slim. But is there harm in asking? Let us know how you get on!
    :)
  • edinburgheredinburgher Forumite
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    Why on earth would the bank accept any less than you owe? This isn't DFW where someone is scraping the barrel because they're broke, you have a cheap mortgage that you can obviously afford. Also, banks can borrow money at market rates, which means they pretty much pay no interest on debt financing at the moment...
  • Hi ZoPig2016 & edinburgher

    Thank you for your replies.

    I don't know how much it costs the bank, the bank inherited my mortgage when they took over the building society we had our mortgage with.

    Yes I can pay monthly easily, it is a blessing that I really appreciate.

    We've scrimped and saved and not had a holiday or a night away in over 11 years & I have two jobs, I just don't want it to come across that I've had a silver spoon.

    I'm making a thousand pounds a year in interest, and as the term is at least another 15 years that is £15k right there assuming that savings accounts match the BoE rate, but on the other hand it'd nice to be 'mortgage free'.

    I don't know what the market rates are, I do know this bank is in big trouble with their non-core businesses.

    Indeed a phone call may not work.

    Thank you again for your thoughts, and I will continue to ponder. If anyone else has other thoughts, including the suck it up fella and pay what is owed, that also works :)
  • It's not costing the bank anything.
  • edinburgheredinburgher Forumite
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    mrginge wrote: »
    It's not costing the bank anything.

    Indeed. OP is confusing the fact that they're effectively stoozing by having such a low mortgage rate and saving elsewhere with thinking that this takes money from the mortgage issuing bank. Perhaps if you have all your savings with them it does, in some small way, but individual savers aren't really who is funding mortgages, it's all fractional reserve banking and cheap cash from government and global institutions these days (or so it would seem).
  • I hadn't registered your rate etc. I'd agree with edinburger, it's not actually worth paying off atm is it as you'd lose money in interest. It's one epic stooze!

    You don't need to apologise for your fortunate position! Indeed bouncing ideas around and aspiring to live our best lives is what this board is all about, whether you start with two pennies or a lot more.
    :)
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