Got to thinking...

[digitek]

I mean I'm down to at least talk about this.

You have a mortgage. You also have $10k in cash. Instead of using your stack of cash to pay down your mortgage (saving yourself money over time in less interest) you instead get a CC BT offer for $10k. They send you some checks and you write them to your mortgage company to pay down $10k on your mortgage note.

So now you are on the hook to pay the bank back $10k and they gave you a year. You put it in a no risk savings account that pays you 1%.

At the end of the year you pay off your $10k BT offer and pocket $100 you made in interest.

Bonus! You also saved yourself about $400 worth of interest you would've paid on $10k at 4% for your mortgage over that year.

If there is no BT transfer fee at all you could save yourself $500 on a relatively risk free loan and investment.

This does sound pretty simple on paper, but something I'm completely not interested in doing myself. I might have some of the facts wrong, too, so please correct me if I'm wrong.

There is a reason interest free loans aren't given out more freely, 0% BT offers have some serious language surrounding their contract and I'm just not keen on fiddling with my mortgage payments at all.

[Anonymous]

“There is a reason interest free loans aren't given out more freely, 0% BT offers have some serious language surrounding their contract and I'm just not keen on fiddling with my mortgage payments at all.”

That’s exactly the issue, there are people (and businesses) doing it, but one has to know exactly how each financial institution involved in the transactions would react to the scenario. If the borrower could guarantee him/herself that the actions would be straight forward and will net to positive outcome, then that’s good. BUT each person has to do their own due diligence before making such decisions. It works for some, doesn’t work for others.

If OP has the asset available to cover the transaction in cash in case anything happens to the loan/invoice/mortgage (be suddenly set to due on receipt) and willing to take the risk, then the CC points accrued might be worth it. But again, it depends on the circumstances. I agree though that mortgages shouldn’t be fiddled with without knowing or having professional advise.

[iced]

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@digitek wrote:
I mean I'm down to at least talk about this.

You have a mortgage. You also have $10k in cash. Instead of using your stack of cash to pay down your mortgage (saving yourself money over time in less interest) you instead get a CC BT offer for $10k. They send you some checks and you write them to your mortgage company to pay down $10k on your mortgage note.

So now you are on the hook to pay the bank back $10k and they gave you a year. You put it in a no risk savings account that pays you 1%.

At the end of the year you pay off your $10k BT offer and pocket $100 you made in interest.

Bonus! You also saved yourself about $400 worth of interest you would've paid on $10k at 4% for your mortgage over that year.

If there is no BT transfer fee at all you could save yourself $500 on a relatively risk free loan and investment.

This does sound pretty simple on paper, but something I'm completely not interested in doing myself. I might have some of the facts wrong, too, so please correct me if I'm wrong.

There is a reason interest free loans aren't given out more freely, 0% BT offers have some serious language surrounding their contract and I'm just not keen on fiddling with my mortgage payments at all.

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What you're describing is leverage. On a large enough scale, it can be a very good ROI, but at the scale we're talking here it's barely worth the effort. Even if the work involved is minimal at each step (and it's often not), you're doing multiple things over the course of a year for...a few hundred dollars? Yeah, I'd pass too.

Leveraging on a large enough scale to make it worthwhile will almost certainly mean finding a replacement for 0% BT offers, which means taking on some risk. Historically, that replacement has been ... a mortgage, making this example all the more strange.

Typically, a leverager will buy a property with a mortgage and then rent it out and/or improve it to sell it at a higher price, with the ROI being the equity of the property rather than the mortgage interest. For the last 15 years, mortgage rates were so low they took the place of the BT offer in this transaction so it's been unusual to leverage the mortgage itself. I guess mortgage rates have ticked back up to the point people are now considering leverage to save interest on them?