mortgage overpayment question

C

coaster27

Guest
Age: 29
Spouse’s/Partner's age: 30

Annual gross income from employment or profession: 57500
Annual gross income of spouse:50000

Type of employment: e.g. Civil Servant, self-employed - Employed in private sector

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

Rough estimate of value of home 250000
Amount outstanding on your mortgage: 367000
What interest rate are you paying?

4.90 until the end of March moving on to a tracker rate 1.25 above ecb

Other borrowings – car loans/personal loans etc
4k loan with credit union for car against 7k shares

Do you pay off your full credit card balance each month?
If not, what is the balance on your credit card? 1k

Savings and investments: 10k in joint credit union, 7k each in individual credit union of which one has a 4k loan against as detailed above.

Do you have a pension scheme? yes

Do you own any investment or other property? no

Ages of children: none but thinking of starting a family soon

Life insurance: no


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

My specific question is if we should overpay our mortgage when our rate moves to the tracker? Our monthly repayments have been 1,893pm and this will drop to 1339pm saving us over 500 euro pm. Are we better off decreasing the mortgage length from 35 years to 22 years which will keep in line with original repayments. Or would it be better to save the money? Is there any benefit in overpaying the mortgage considering that we would like to think that we could trade up in a number of years as we are considering starting a family.

All advice appreciated.
 
Pay the 500 per month off the car loan first, as it is definitely at a higher interest rate than the mortgage. Once that's gone, make a standing order to a deposit account that pays higher interest than your tracker rate. If you cannot find such an account, the it makes sense to overpay your mortgage provided you have enough of a rainy day fund.
 
use cu money to clear the 1k credit card debt and also to clear the cu loan as they are both high interest

start saving the spare money in regular saver account and build rainy day fund....do not have this reg saver in same bank as your mortgage
 
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