PTSB to offer 2% cash back on mortgages for new customers

rte.ie/news/business/2016/01 … age-offer/

Following a similar BoI offering

Is this not just a sneaky way of avoiding the deposit requirement? ie on a 300K mortgage, you get 6k back, meaning you need 6k less of a deposit?

It’s looking that way, isn’t it. Or else it pays your stamp duty and legal costs

How do they get the 6k to you before drawing down the mortgage. Wouldn’t they have to ‘gift’ it?
The boom is back lads! :laughing:

I thought that the cashback didn’t kick in until after everything is closed? Meaning that you can’t really use it towards your deposit? Would be interested to hear from anyone who’s actually availed of it whether that is correct.

Does mean you don’t have to hold anything back for the new couch/bed/wardrobe or whatever other “basics” you’ll need in the first few months though.

Paying back the credit union loan? :smiley:

More likely the bank of Mum & Dad.

took advantage of this offer with boi. cash is transferred to your account 6 weeks after draw down.

That’s the way around the CB rules alright. Get the old pair to take out a Credit Union loan. They give you a ‘gift’ of EUR6k. 6 weeks later you pay them back

Does this not incur gift tax, or at least use up lifetime allowances? Or do people just misrepresent it as a gift to the banks, but represent it as a loan to the Revenue?

Perhaps it’s the case that if the gift is returned within a tax year then there’s no effect on lifetime allowances?

€3k annual small gift tax exemption available from each parent to each child.

So 2 parents = €6k tax free. Do that on 31/12/15 and 01/01/16 and you can have €12k.

And yes I’m sure many are misrepresenting it as a gift to the bank when in fact it’s a loan that will repaid later - but that’s hardly new.

It’s just an attempt to increase market share. The 2% cash back lead to a lot of people opting for BOI over competitors with better rates last year. Even if there’s a 5 year clawback period you can switch out immediately afterwards and chances are it will have saved you more money.

Do you mean switch immediately or after the 5 years :question:

BoI have just extended their 2% cash back to 30th June

After 5 years. BOI have a clawback if you switch within 5 years. You’d need to work out the cost of credit saving over the first 5 years on the best rate in the market versus the amount of a 2% cashback although that does assume BOI and the competitors’ rates holding at that level over that period.

Thanks, that makes sense.
I’d assume the difference in rates would be broadly the same, though (Cashback banks vs. cheapest SVR).