37 €10K Savings €170K Mortgage (what's next?)

I

icb

Registered User
Messages
30
Age:
37

Annual gross income from employment or profession:
€60,000

Type of employment:
Private sector employee

Expenditure pattern:
Saver, or have been until mortgage started 6 months ago. Spending plenty on house non necessities.

Rough estimate of value of home:
€425K

Mortgage on home
€170K

Mortgage provider:
AIB

Type of mortgage: Tracker, interest only, fixed rate
Variable (32 year)

Interest rate:
3.65%

Monthly available €:
After electricity/heat/food I have approx €2K in my account

Other borrowings – car loans/personal loans etc
None

Do you pay off your full credit card balance each month?
N/a

Savings and investments:
€10K savings.

Getting some work done in kitchen that'll cost circa €3K

Do you have a pension scheme?
No, this I understand to be my greatest financial misstep based on my age!

Do you own any investment or other property?
No.

Ages of children:
None.

Life insurance:
No.

Credit available:
€15K AIB Credit Card

€4K Revolut Credit Card

What specific question do you have or what issues are of concern to you?

I'm trying to keep an emergency fund but I keep checking AIB calculator and seeing that I can make decent total credit cost savings when I pay off extra often.

I've been doing that with any money left over my €10K savings

It's probably not the best use of funds here, especially when I have no pension started.

My employer doesn't offer contributions to pensions.

My employment is relatively safe, if I got into financial trouble I'd rent the spare room.

I think there'll be a resound You should start a pension response here, other posts suggest that a lot!

Any other, you could be doing this/doing this better, advice is appreciated.
 
icb said:
I've been doing that with any money left over my €10K savings
Click to expand...

You're saying you started a tracker mortgage interest only 6 months ago?

You have been overtaking this interest only loan with any spare cash?

I would say set up a pension, contributing say 5% per annum is 3,000 per year maybe?

But if the mortgage is interest only what are you going to do in 32 years time when the bank demands repayment in full?

Interest only on owner occupied seems odd to me. I can only think this is a re arranged investment property.
 
It's a variable rate mortgage over 32 years with a current rate of 3.65%
 
It's a tough one.

The reflex reaction is "start a pension."

But I am not sure that you should be doing this yet.

icb said:
Annual gross income from employment or profession:
€60,000
Click to expand...

icb said:
Mortgage on home
€170K
Click to expand...

A mortgage three times your income when interest rates are relatively high is a bit too high.

I think I would aim to bring the mortgage down to twice your income before starting a pension.

Alternatively, if interest rates fall significantly, then a mortgage of more than twice your income would be o.k.

Would you consider renting a room now to put your finances on a much surer footing? It's easier to share at 37 than at 47. And if you get €10k tax-free, then you could really get your mortgage down much quicker.

Brendan
 
moneymakeover said:
You're saying you started a tracker mortgage interest only 6 months ago?

You have been overtaking this interest only loan with any spare cash?

I would say set up a pension, contributing say 5% per annum is 3,000 per year maybe?

But if the mortgage is interest only what are you going to do in 32 years time when the bank demands repayment in full?

Interest only on owner occupied seems odd to me. I can only think this is a re arranged investment property.
Click to expand...
I had to read this a few times. I think the template to complete has this heading:

Type of mortgage: Tracker, interest only, fixed rate

and the answer is this:

Variable (32 year)
 
Brendan Burgess said:
A mortgage three times your income when interest rates are relatively high is a bit too high.

I think I would aim to bring the mortgage down to twice your income before starting a pension.

Brendan
Click to expand...
thanks for coming back to me Brendan.

Can you please expand on this part, the issue is I don't envisage any pay raises in the foreseeable future, is your steer on mortgage three times income based on me being a single earner?

Thankfully, at the moment, the €760 a month is very manageable, so, maybe incorrectly, it's made me less fearful of the mortgage balance relative to my pay.

I agree at 47 it'll be more difficult to have the will to share after being used to not having to, I'm really enjoying it just being me the past 6 months, a luxury I know I'm paying for!
 
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