# 40yo with 10yrs left on mortgage



## Boden78 (2 Feb 2019)

Age:
41
Spouse’s/Partner's age:
41

Annual gross income from employment or profession:
E76k
Annual gross income spouse:
E0

Type of employment:
private sector

Expenditure pattern:
We are both generally 'savers'

Rough estimate of value of home
E260k
Mortgage on home
E120k - 10yrs left
Mortgage provider:
EBS
Type of mortgage: Variable 3.7%

Other borrowings – car loans/personal loans etc
None

Do you pay off your full credit card balance each month?
Yes

Savings and investments:
E100k

Do you have a pension scheme?

Yes. Current value E130k. Pay 6.375% roughly E420pm with employer paying 10%. 

Wife paid pension for about 10years before becoming homemaker. 

Do you own any investment or other property?
No. 

Ages of children: 5 year old

Life/health insurance:
- mortgage protection
- health insurance
- company pension includes death in service 

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

Savings all currently available immediately in savings account. So earning next to nothing. Have begun to overpay mortgage. Not sure whether to redirect some of the savings into making a dent in mortgage, continue just overpaying, or if I should be contributing more to pension, or keep saving away. 

Thanks for your time.


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## luckystar (2 Feb 2019)

Step one would be to switch your mortgage!! Far better rates out there esp with a <50% LTV!

Any plans to move or do work on the house?

I'd be very tempted to be mortgage free, but personally I'd like to keep a decent portion of money to hand but that's me.


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## Boden78 (2 Feb 2019)

Thanks! No plans to move, & not planning to do any major renovations.


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## moneymakeover (2 Feb 2019)

Why not just pay down 100k on the mortgage

Then you'll be mortgage free in about 1 year


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## HollowKnight (3 Feb 2019)

Switch to Aib to get their lowest variable rate. 
Then pay lump sum off the remaining mortgage.


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## RedOnion (3 Feb 2019)

HollowKnight said:


> Then pay lump sum off


Why wait until after switch?


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## HollowKnight (3 Feb 2019)

RedOnion said:


> Why wait until after switch?


Unlikely to get a switch on small balance.


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## RedOnion (3 Feb 2019)

HollowKnight said:


> Unlikely to get a switch on small balance.


From AIB switcher guide:
"Minimum loan amount is €25,000."



Boden78 said:


> Not sure whether to redirect some of the savings into making a dent in mortgage


Specifically in relation to mortgage.

You're a single income family with a young child. So you need a bit of a cash safety net. 
General consensus is about 6 months worth of expenses. 
I'd be looking at 25 to 30k left in easily accessible funds.
Take 70k and immediately pay off mortgage. Now you've a 50k mortgage.
Keep term the same, but fix the rate at 3%, or switch to another lender for a better rate. At 3% your mortgage is a very manageable 480 per month.

That frees up a lot of cashflow each month to either pay mortgage quicker, or increase pension contributions.

In similar circumstances, I realise my wife isn't building a pension pot while at home. I'd be increasing pension contribution substantially, so that you build a decent pot. If your wife returns to work in future, you could decrease your contribution rate to allow her build up her pension if you can't afford to both pay in top rates.

Remember you can get tax relief on up to 25% of salary paid into pension. You can make a single contribution before October, and allocate it to last year to get tax relief. I'd be doing that as well.


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## HollowKnight (3 Feb 2019)

RedOnion said:


> From AIB switcher guide:
> "Minimum loan amount is €25,000."



Thought it was more.


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## RedOnion (3 Feb 2019)

Boden78 said:


> Life/health insurance:
> - mortgage protection
> - health insurance
> - company pension includes death in service


I know you didn't ask, but you should consider income protection.  Financially, your family are well covered if you were to die, but you'd struggle if you couldn't work.


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## RedOnion (3 Feb 2019)

HollowKnight said:


> Thought it was more.


Ah, to be fair, most banks have a minimum of 40k or 50k for mortgages.
They're not going to be chasing business at 25k - it wouldn't cover the underwriting costs in most cases.


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## Boden78 (3 Feb 2019)

Thanks so much for comment so far.

I feel the savings should be working for me more then they are currently. And whether I need that amount sitting around when it could go to mortgage or pensions. 

Great point on income protection. Work sick leave scheme is good but something I should look into. I feel I should investigate life insurance in general - or is death in service sufficient typically?

On mortgage payment. Is it going to be worthwhile moving providers once factor in legal fees etc - or am I better reducing the balance with some of my savings, & then fixing at 3% for a couple of years where I am?


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## RedOnion (3 Feb 2019)

Boden78 said:


> Is it going to be worthwhile moving providers once factor in legal fees etc -


UB, KBC and AIB will all pay you a set amount to switch, which will more than cover all your costs. And the all have better rates.



Boden78 said:


> is death in service sufficient typically?


I'm reviewing my own situation at the moment. If something happens to me, my wife's finances would be ok. But the other way around I've put a policy in place for. 2 young children - if anything happened my wife, I want to be there for our children, and not worrying about money.


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## Laughahalla (12 Feb 2019)

As there is just one income i'd set aside four to six months worth of expenses as an emergency fund.
Set up a savings account for your childs college education
Pay 15% of your income into a pension and with the remaining agressively pay off your mortage.
KBC (3k contribution) and Ulster bank(1.5k pays for solicitor) have lower rates.

Having your home paid and being debt free gives you and your family alot of freedom. Can you imagine what it would be like if you didn't have the mortgage payment and had 12k to invest each year compunding at 7%. You'd have a very comfortable retirement.


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## Boden78 (24 Jan 2021)

I can't believe its been 2 years since I first filled this in. I thought I would update it based on latest circumstances. 

Age:
43
Spouse’s/Partner's age:
43

Annual gross income from employment or profession:
E82.5k (up from E76k in 2019)
Annual gross income spouse:
E0

Type of employment:
private sector

Expenditure pattern:
We are both generally 'savers'

Rough estimate of value of home
E260k
Mortgage on home
E83k - 8yrs left (down E37k in last 2yrs)
Mortgage provider:
EBS
Type of mortgage: Variable 3.7%

Other borrowings – car loans/personal loans etc
None

Do you pay off your full credit card balance each month?
Yes

Savings and investments:
E100k

Do you have a pension scheme?

Yes. A DB & DC. Frozen DB which is due to pay out E12k pa at retirement. DC Current value E172 (up from E130k in last 2yrs). Pay 6.375% roughly E420pm with employer paying 10%.

Wife paid pension for about 10years before becoming homemaker. Current value E44k.

Do you own any investment or other property?
No.

Ages of children: 7 year old

Life/health insurance:
- mortgage protection
- health insurance
- company pension includes death in service

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

I have been out of work since Oct following a health problem and subsequent surgery. I have good sick leave from work so has not impacted income. I hope to return to work next month. I presume illness cover for anything in the future would be either cost prohibitive or not available to me.

My wife has an inheritance of E150k coming this year. Presume we should clear the mortgage and maximise my pension contributions?. Should we look to move my wifes pension to a PRSA and start paying into this as well?


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## Brendan Burgess (24 Jan 2021)

If you had paid off your mortgage when you were first advised to do so, you would have an extra €7,400 now. 

It is still the right thing to do - now.  No need to wait for your wife's inheritance to come through.

Brendan


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