Top Mortgage Loophole

PHickman

Poooo... just another 2 years for me then I am out of my tie-in and can take up lovely offers like this.

On the plus side, this is *exactly* what I did with my mortgage three years ago. The "Chelsea BS" were offering 5% cashback, with 5year tie-in, and no penalty on over-payments. I took the mortgage, ploughed the 5K straight back off the mortgage and reduced my monthly payments... and kept my payments the same (as they would have been if I had made no lump sum payment) so I was overpaying every month.

You should check that any overpayments or lump sum payments come off the capital, and not off the interest + capital..!!! A big rip-off if your over-payments are just coming off your interest (not a problem if interest calculated daily).

photome

Bennifred wrote:

That's fantastic! If only I wasn't on a fixed rate already........... :rolleyes:

With the amount of cashback you can get, can you not buy youself out of the tie in

sara2323

Ohhh....... I don't have a mortgage, paid it off and transferred to 0 %credit cards.

secreticicle

does this work on £150,000 and £100,000 outstanding? I have a friend who needs to remortgage...

secreticicle

oh yes, just did the sums - about £4,700 extra cash...

Reaper

beefster wrote:

Even if you repay the cashback..... 3.77% is a good rate, plus the interest made on the cashback? Does this not make it worthwhile??

No - the 3.77% was calculated assuming you had and kept the cashback. Have another read of the details - the real rate is 6.1%

scotnan

witteringFool wrote:

And just my luck - England and Wales only. Not for us Scots then.

Thankls for advising of this very important qualification witteringFool

I've just spent the last 45 mins looking out all my mortgage papers to phone first thing in the morning too . Boo Hoo!

oops_3

Can someone with no mortgage take out say, £100K, get £7k cashback, pay back £99,999 leaving £1 at 6.1 % owing plus sundry charges (deed production etc) and effectively walk with £7k?
Have I missed something glaringly obvious here?

MSE_Martin

Just to clarify

The 3.77% rate is the effective rate if you discount the cashback. However that is only on the REAL cashback ie (the cashback on £50,000 borrowing, if you only intend to long term borrow that), it doesn't include the LOOPHOLE cashback (ie the borrowing on any money repaid on day 2 of the mortgage)

Reaper

PHickman wrote:

You should check that any overpayments or lump sum payments come off the capital, and not off the interest + capital..!!! A big rip-off if your over-payments are just coming off your interest (not a problem if interest calculated daily).

I just spoke to L&C brokers who tell me it is daily calculated interest