So - more cash borrowed + term extended for another 15-20-25 years?
I assumed the bank gave you a check for simply saying you would not switch for 2 years.
My local mate has been getting a cheque 5 times over the last 10 years (1%-2% each time) for doing nothing, simply extending the lock in period of his mortgage with the bank.
In my case, I just did the a quick math and I actually got 5% cashback last year (I had a $3m outstanding mortgage and got $152,500 cashback). The way I did this was to redo the mortage from scratch, but still stayed with the same bank (SC), had to pay $5k-10k for a solicitor, I redrew up to $7m (50% of my property current value), but then the extra $4m I redraw can deposit straight back onto the loan once done so still end up with a $3m mortgage in the end. So effectively 5% cashback on a $3m mortgage . Having to visit a solicitor and do all that shit was a pain but definitely worth it to get $152k cash back.
OK, for me neither of the two options are acceptable as both involve a fair bit of higher level of maths than I am used to.
I am suspending my current principal payments.. That's it. But my mortgage is in its twilight years so it makes little or no practical difference. Just preserving some short term cash flow.
Had looked at remortgaging but looked like too much headache and did not want to increase the amount for risk reasons.
You can at the moment - several banks are giving customers the option to do so temporarily.Original Post Deleted
There was a thread about this last year, they stopped doing 2% and last I had checked around October it was closer to 1.5%. Maybe it's dropped lower since then. Off memory bdw managed to sneak in just before the initial drop.
That's pretty impressive. If I've read that right your cash back is about what the interest component on your resulting mortgage payments would be over a two year period which means you've effectively got about two years interest free finance.
Does anyone have any recent experience with DBS cash back deals?
I don't think you can just turn around and repay the loan with the additional borrowings. I think @bdw might be referring to putting the cash into the mortgage offset account, which has the same effect.
Crap, I wish I'd thought if this, even though I suspect you're not supposed to do this.
Sorry guys, yes to clarify I meant to dump the money into a mortgage offset account rather than repay the mortgage. So I increased my mortgage from $3m to $7m, got 2.1% cashback on $7m, then can put $3.5million back into an offset account which earns interest at the same rate as the mortgage, therefore has the same effect as reducing my mortgage back down to $3.5m.
Incidentally I think the offset account is BETTER than paying off your mortgage, same effect but leaves you with some flexibility to redraw, invest it somewhere else, buy a car, or do whatever you want with it .
- I still think SC are a bunch of morons, and there is some fumdamental flaw in the system, but anyway might as well take advantage of it.