€10k to spare,Mortgage or Invest

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Cavangal

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Hello can I get some advice please?
I have €10k aside and I am wondering if I should put it off my mortgage or consider investing it. My mortgage payment is pretty low around €450 monthly but I overpay by €150. The balance is around €86k variable at 3.7%.
I am wondering what would be best to do? I don't know much about investing but I know better use could be made of the funds.
 
Jazz01 said:
What I would recommend is that you looking into changing mortgage providers or looking at a better rate for your mortgage with your current provider - 3.7% is high, even for this country!
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Thanks for your reply. I am on a Carer payment so no bank would consider this. 3.7% is the best I can get, ltv around 43%.
 
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You should not invest while paying a mortgage of 3.7%. You would never get a risk free return to of better than 3.7%.
 
If that 87k of at 3.75% for 25 years (that’s looks to be about €450 a month) paying off 10k now will save you €27000 over the term of the mortgage or reduce the term by 12 years. It’s a lot of return on your “investment”
 
TheBig40 said:
If that 87k of at 3.75% for 25 years (that’s looks to be about €450 a month) paying off 10k now will save you €27000 over the term of the mortgage or reduce the term by 12 years. It’s a lot of return on your “investment”
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Hi the original term was 35 years started mid 2010. The payment varied due to trs and stage payments. I paid €3k just last October and pay €600 per month although I think the normal payment is €450ish.
 
Cavangal said:
My mortgage is with Ptsb
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Ah, so you're currently on their MVR.

PTSB have made better fixed rates available to existing customers.
2 year 3.1%
3 year 2.9%
5 year 3%

They're fixed rates.

They can charge 3.7% because people don't avail of the better rates available.

Reason I asked about pension was that I wouldn't invest outside a pension while carrying mortgage debt, but you might not get any tax relief in your circumstances.
 
If you don't have a lot of other savings then I would just save this €10k for a rainy day.
Once it's gone into the Mortgage then it's gone and you'd need to borrow money for another big purchase such as a car or some home improvement or repair.
 
Pay off the mortgage... It's a nice chunk off €86k.

Psychologically, you feel great to see the mortgage balance come down.

Closer to the €50k... After that, it's all downhill from there and you'll see the balance going down and down and down and....
 
Just to add, since you're with PTSB. They have a feature available where you can make overpayments to your mortgage, but then in future if you can't meet the repayment amount they just use up the overpayments. So it reduces the risk of making overpayment now and then going into arrears in future.

Discussed in the following thread.

Key Post - How overpaying a ptsb mortgage works

I was vaguely aware of this but it was brought to my attention this morning by someone who is choosing ptsb because of this facility. https://www.permanenttsb.ie/globalassets/pdf-documents/mortgages/mortgage-arrears/bmk3625..-flexible-mortgage-options-aug-19..-1.05mb.pdf In simple terms, if...
www.askaboutmoney.com
 
Cavangal said:
Hi the original term was 35 years started mid 2010. The payment varied due to trs and stage payments. I paid €3k just last October and pay €600 per month although I think the normal payment is €450ish.
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I think the maths will work out about the same. If you have some other rainy day funds and don’t “need” the 10k a lump off the outstanding balance will have a big impact especially if you carry on with the overpaying as well. It won’t let me link to it but of you google Overpayment calculator you will be able to plug your figures into it.
 
RedOnion said:
Ah, so you're currently on their MVR.

PTSB have made better fixed rates available to existing customers.
2 year 3.1%
3 year 2.9%
5 year 3%

They're fixed rates.

They can charge 3.7% because people don't avail of the better rates available.

Reason I asked about pension was that I wouldn't invest outside a pension while carrying mortgage debt, but you might not get any tax relief in your circumstances.
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Not sure what MVR means but it's definitely 3.7%. I would not mind fixing for two or three years but I would probably have to pay the €10k off first.
I will read the other link thanks
 
sadie said:
If you don't have a lot of other savings then I would just save this €10k for a rainy day.
Once it's gone into the Mortgage then it's gone and you'd need to borrow money for another big purchase such as a car or some home improvement or repair.
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Hi i have an emergency fund. This is just funds I had no plans for.
 
Sarenco said:
If you paid €10k off your mortgage (without changing the term) and fixed for, say, three years you would materially decrease your monthly expenses.

Definitely worth considering from a lifestyle perspective.
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I never thought of it in that way. Is there a way of working out the difference?
 
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