Lump sum use

K

kenr2022

New Member
Messages
4
Age: 39
Spouse’s/Partner's age: 34

Number and age of children: 1 under 1


Income and expenditure
Annual gross income from employment or profession: ~150K
Annual gross income of spouse: ~100K
Monthly take-home pay: ~€6200 (mine)

Type of employment: e.g. Civil Servant, self-employed

Self-employed (IT contractor)

In general are you:
(a) spending more than you earn, or
(b) saving?

Saving 2/3K a month


Summary of Assets and Liabilities
Family home worth €580k with a €415k mortgage
Cash of €20K


Family home mortgage information
Lender : PTSB
Interest rate: 2.35
If fixed, what is the term remaining of the fixed rate? 4 years

(No need to tell us the monthly repayments or what term is left)

Other borrowings – car loans/personal loans etc
Do you pay off your full credit card balance each month? Yes
If not, what is the balance on your credit card?


Buy to let properties
Buy to Let Property to be sold with €100K share

Other savings and investments:

Do you have a pension scheme?
Pension - 160K Zurich directors pension, currently adding 23K per year. Projection of 1.9m fund.
50K in an old PAYE pension

Do you own any investment or other property? No

Other information which might be relevant

Life insurance: No
I have mortgage protection & Income protection insurance


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

I will be selling an investment property soon and due to get around 100K in a lump sum. I was planning to put this against our mortgage of 415K
, I'm with PTSB so I believe I can put this against the mortgage, repayments would be the same but interest will be lower and you could use this then if a payment break was needed for some reason.
Any thoughts on this ? Should I be adding more to the pension instead or maybe a separate investment?

Many thanks!
 
Ignore the pension projection - it's largely meaningless.
Where are you saving the €2-3k monthly?
If not in the pension then maybe you should?

Have you checked with PTSB what. if any, breakage fee you will face if you pay €100K off the fixed term loan early?

I'm curious why you state both gross incomes but only your own take home rather than treating the household finances/income jointly?
 
Hey Clubman,
Thanks for the reply. The savings are between raisin.ie and trade republic so I'm getting between 2 to 3.5 % interest at the moment (minus tax).

There would be no breakage fee from PTSB, you just put the money into a prepay account and the interest would reduce.

We still manage our finances separately outside of mortgages/bills. We will probably look to setup a joint account at some stage.
 
Get life cover for the two of you. You have someone dependent on you now. And kids are bloody expensive!! Everyone underestimates how expensive they are!!

With the lump sum, put some of it against the mortgage. Don't get the monthly repayments reduced, just have it paid off earlier. Invest some of it for medium term expenditure that you may have in the future. Then with future excess cash, lump that in against your mortgage.

But using it all to pay down your mortgage is never the wrong thing to do.

You are both on good incomes. Spend less than you earn and invest the rest. Have good habits with spending, debt and investing and you'll do alright.


Steven
www.bluewaterfp.ie
 
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