# Making our money work harder!



## BusinessFailure (29 Feb 2020)

Age: 44
Spouse’s/Partner's age: 42

Annual gross income from employment or profession: €100K
Annual gross income of spouse: €120K

Monthly take-home pay: €3,800 + €4,500 = €8,300

Type of employment: Private Sector PAYE

In general are you:
(a) spending more than you earn, or
(b) saving?
"Saving", in that we're left with about 4K a month but not doing much with it.

Rough estimate of value of home: €450,000
Amount outstanding on your mortgage: €300,000 - 25 years left on mortgage
What interest rate are you paying? 3.0% (fixed for another 9 years) -> €1,500 but overpaying an extra €600

Other borrowings – None

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

Savings and investments: About €40K in cash not doing much in the bank

Do you have a pension scheme? Yes. Both maxing out at 25%

Do you own any investment or other property? No

Ages of children: None

*What specific question do you have or what issues are of concern to you?*
For many years we were not in a great financial position, and didn't have any savings or pensions to speak of.  This has changed in the past year and we are now in a much better position, but we're not making our money work effectively (it's just sitting in our current account).  The first things we did were start overpaying the mortgage, and maxing out pension contributions, but *we still have about €4k left over each month that we should be doing something with*.  We'd be fairly open to risk, so was thinking about putting the €40k in a bond (rainy day fund) and start buying ETFs, but wanted to ask if there were better ideas.  Would we be much better off if we broke out of the mortgage, setting up an overpayment that is much larger than the current €600?


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## Fidgety (1 Mar 2020)

You’ve both done great with lots of time to generate some wealth.

Consider how much you need as a safety fund so you have that comfort in the event of a work disruption.

Attack your mortgage.

Invest the balance in a basket of equities.

Have fun and enjoy your life.


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## Sarenco (1 Mar 2020)

This article is a useful summary of the various options -









						Excess cash? Save it, spend it or pay off debt?
					

Ireland is a nation of savers - collectively, we have around €100 billion sitting in deposit accounts in banks and other financial institutions.




					www.rte.ie
				




Personally, I don’t think it makes sense to invest after-tax savings while carrying a mortgage.


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## Techhead (1 Mar 2020)

Very true but it’s hard for folks to put their life savings into their house. Your could put the 40k into a fund from Zurich or Irish life. Sarenco is right that it makes more sense to pay off the mortgage but I can’t make that leap fully either... even if the numbers stack up


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## BusinessFailure (1 Mar 2020)

Thanks for the replies folks.  Time to call the bank and see what the mortgage break fee is and pay more into that sucker!


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## HollowKnight (1 Mar 2020)

BusinessFailure said:


> Thanks for the replies folks.  Time to call the bank and see what the mortgage break fee is and pay more into that sucker!


If you're going to break to overpay, you should probably try get on a cheaper rate at the same time. You could look at borrowing 300k from UB at 2.2%.


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## RedOnion (1 Mar 2020)

Which bank is the mortgage with?
Remember you don't have to break out of the whole amount; just the bit you want to overpay by.


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## BusinessFailure (1 Mar 2020)

RedOnion said:


> Which bank is the mortgage with?
> Remember you don't have to break out of the whole amount; just the bit you want to overpay by.



Bank of Ireland
I didn't know you could break out of just part of it.  Thanks for the pointer RedOnion!


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## RedOnion (1 Mar 2020)

BusinessFailure said:


> Bank of Ireland


With BOI you can increase your monthly repayments by 10% without them calculating a break fee. I'm not sure though what you mean about already overpaying by 600 per month? Were you overpaying regularly before you fixed, and they included that in your repayment? 

Apart from that, say if for example you want to pay an extra 10k, they'll only calculate the break fee on the 10k, not the whole amount.


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## BusinessFailure (1 Mar 2020)

RedOnion said:


> Were you overpaying regularly before you fixed


Yes.  When we came off our last fixed rate, I stayed on the variable rate for a month and added the overpayment.  When I then went fixed, the overpayment stayed at that level without penalty.


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## RedOnion (1 Mar 2020)

Ah, that makes sense.


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