€150k to invest

D

davep

Registered User
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Would appreciate some advice. I will have within the next few weeks €150k to invest. This is a combination of an inheritance and An Post savings maturing. With bank rates so so low what would anyone here think of doing.
I have no financial problems other than an 80k tracker mortgage at .65%. I have no intention of clearing this and was laughed at by the bank when I offered to do a deal to clear this having heard just how problematic and costly these mortgages are to them. They informed me it "would open the flood gates if they accepted less than the total amount" So I will continue paying it off month by month until rates make it beneficial to me!
I thought about Prize bonds????? I am will to put 25% into a "risky" area if returns might justify it.
thanks
Dave
 
I don't think tracker mortgages are as costly and problematic to banks now as they were a couple of years ago.
 
emeralds said:
I don't think tracker mortgages are as costly and problematic to banks now as they were a couple of years ago.
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Well to hear the banks complain about them you might think that they are a problem. I can pay off my 80k over the next 7 years or tomorrow. Should I clear everything tomorrow, I guess that the bank could gain massively more than the .65% they are currently getting from me! I do not pretend in any way to understand banks or lending BUT .65% for next couple of years from me or 4%+ lending by the bank to others???????? Cannot make any sense of it
 
My advice in this case is do what is right for yourself. Forget about trying to second guess the bank. Be happy with your lot and the fact that you can pay off your mortgage if you choose.

If you're in good shape financially the comfort of knowing my mortgage was fully paid would be music to my ears. No real downside either way as long as you don't risk the 150k or too much of it.
 
Gerard123 said:
My advice in this case is do what is right for yourself. Forget about trying to second guess the bank. Be happy with your lot and the fact that you can pay off your mortgage if you choose. .

If you're in good shape financially the comfort of knowing my mortgage was fully paid would be music to my ears. No real downside either way as long as you don't risk the 150k or too much of it.
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So is your advice to pay off the mortgage at this time? This seems to go against any other advice I have seen on this forum
 
Personally, my approach would be to save it in an account that offers more than 0.70% after DIRT, until such a time as interest rates make it more beneficial to pay it off in full (as you said yourself).

But I can see Gerard123's point also. Sometimes the psychological side of things comes into it also i.e. 'I've no mortgage left to pay' and the pleasure that brings with it!
 
Not putting your money against a tracker mortgage makes sense if you get a greater return from investing it. Putting it into prize bonds gives up you zero return so it is costing you to service the mortgage.

Either make a diversified investment or pay off the mortgage. Putting it in prize bonds would be the worst choice in my opinion...unless you win the jackpot ;)

Steven
Www.bluewaterfp.ie
 
10 year National Solidarity Bond gives 2.26% AER net if you leave it invested for 10 years. 120k max
4 year National Solidarity Bond gives 0.99% AER net if you leave it invested for 4 years. 120k max.

You could put half of 150k in the 10 year NSB and half in the 4 year NSB? Then in 4 years time, reevaluate your mortgage and whether you want to pay it off or not. If there is a dramatic change in the interest rate environment or your own personal circumstances before then you can get at your 150k with a weeks notice.

On this forum, for at least the last year we have been talking about how out of line these NSB interest rates are with bank interest rates and sovereign bond yields and how a cut must be imminent. Yet no cut has come. Just this week the NTMA sold 10 year sovereign bonds with a yield of 1.156% - yet the retail 10 year bond still gives net interest of 2.26%?
 
PaddyW said:
Personally, my approach would be to save it in an account that offers more than 0.70% after DIRT, until such a time as interest rates make it more beneficial to pay it off in full (as you said yourself).
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Absolutely agree but I don't think there are currently any instant access deposit accounts that will pay more than 0.7% after DIRT and fees (where applicable). Any other investment option (including longer term savings bonds/certs) involves taking more risk than simply paying off the mortgage.

If it was me, I would pay off the mortgage, keep roughly 3-6 months' expenses in a Rabo direct instant access account and the balance in 4 year NSBs. Make sure to maximise all pension contributions/AVCs where possible and maintain an appropriate allocation to equities within the pension wrapper.
 
Sarenco said:
Absolutely agree but I don't think there are currently any instant access deposit accounts that will pay more than 0.7% after DIRT and fees (where applicable). Any other investment option (including longer term savings bonds/certs) involves taking more risk than simply paying off the mortgage.

If it was me, I would pay off the mortgage, keep roughly 3-6 months' expenses in a Rabo direct instant access account and the balance in 4 year NSBs. Make sure to maximise all pension contributions/AVCs where possible and maintain an appropriate allocation to equities within the pension wrapper.
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Pretty good idea but I would also suggest taking 5-10k of the money and just do something pleasurable with it, holiday of a lifetime, trip to the Euro's, whatever takes your fancy. Life's too short
 
Was in the same boat myself last march had the money to pay my 2 mortgages one variable one tracker(1%)
Asked the bank for a deal they said no, so I paid the variable and parked the rest.
Bought prize bonds and have got just over a 1% return in 9 months
Probably will pay the mortgage this year or very early 2017
 
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