# €10k to spare,Mortgage or Invest



## Cavangal (8 Jan 2021)

Hello can I get some advice please? 
I have €10k aside and I am wondering if I should put it off my mortgage or consider investing it. My mortgage payment is pretty low around €450 monthly but I overpay by €150. The balance is around €86k variable at 3.7%.
I am wondering what would be best to do? I don't know much about investing but I know better use could be made of the funds.


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## Jazz01 (8 Jan 2021)

Cavangal said:


> The balance is around €86k variable at 3.7%.


What I would recommend is that you looking into changing mortgage providers or looking at a better rate for your mortgage with your current provider - 3.7% is high, even for this country!


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## Cavangal (8 Jan 2021)

Jazz01 said:


> What I would recommend is that you looking into changing mortgage providers or looking at a better rate for your mortgage with your current provider - 3.7% is high, even for this country!


Thanks for your reply. I am on a Carer payment so no bank would consider this. 3.7% is the best I can get, ltv around 43%.


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## PGF2016 (8 Jan 2021)

You should not invest while paying a mortgage of 3.7%. You would never get a risk free return to of better than 3.7%.


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## TheBig40 (8 Jan 2021)

If that 87k of at 3.75% for 25 years (that’s looks to be about €450 a month) paying off 10k now will save you €27000 over the term of the mortgage or reduce the term by 12 years. It’s a lot of return on your “investment”


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## Cavangal (8 Jan 2021)

PGF2016 said:


> You should not invest while paying a mortgage of 3.7%. You would never get a risk free return to of better than 3.7%.


Thank you


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## RedOnion (8 Jan 2021)

Cavangal said:


> variable at 3.7%


How's your pension funding?

And which bank is mortgage with? EBS?


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## Cavangal (8 Jan 2021)

TheBig40 said:


> If that 87k of at 3.75% for 25 years (that’s looks to be about €450 a month) paying off 10k now will save you €27000 over the term of the mortgage or reduce the term by 12 years. It’s a lot of return on your “investment”


Hi the original term was 35 years started mid 2010. The payment varied due to trs and stage payments. I paid €3k just last October and pay €600 per month although I think the normal payment is €450ish.


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## Sarenco (8 Jan 2021)

Cavangal said:


> 3.7% is the best I can get, ltv around 43%.


Could you use the €10k to further pay down the mortgage and then fix at a lower rate with your existing provider?


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## Cavangal (8 Jan 2021)

RedOnion said:


> How's your pension funding?
> 
> And which bank is mortgage with? EBS?


Hi i don't have a pension, is that silly? 
I am not sure about them as I am on welfare, sort of. 
My mortgage is with Ptsb.


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## RedOnion (8 Jan 2021)

Cavangal said:


> My mortgage is with Ptsb


Ah, so you're currently on their MVR.

PTSB have made better fixed rates available to existing customers. 
2 year 3.1%
3 year 2.9%
5 year 3%

They're fixed rates.

They can charge 3.7% because people don't avail of the better rates available.

Reason I asked about pension was that I wouldn't invest outside a pension while carrying mortgage debt, but you might not get any tax relief in your circumstances.


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## sadie (8 Jan 2021)

If you don't have a lot of other savings then I would just save this €10k for a rainy day. 
Once it's gone into the Mortgage then it's gone and you'd need to borrow money for another big purchase such as a car or some home improvement or repair.


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## PaddyBloggit (8 Jan 2021)

Pay off the mortgage... It's a nice chunk off €86k.

Psychologically, you feel great to see the mortgage balance come down.

Closer to the €50k... After that, it's all downhill from there and you'll see the balance going down and down and down and....


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## RedOnion (8 Jan 2021)

Just to add, since you're with PTSB. They have a feature available where you can make overpayments to your mortgage, but then in future if you can't meet the repayment amount they just use up the overpayments. So it reduces the risk of making overpayment now and then going into arrears in future.

Discussed in the following thread.






						Key Post - How overpaying a ptsb mortgage works
					

I was vaguely aware of this but it was brought to my attention this morning by someone who is choosing ptsb because of this facility.  https://www.permanenttsb.ie/globalassets/pdf-documents/mortgages/mortgage-arrears/bmk3625..-flexible-mortgage-options-aug-19..-1.05mb.pdf    In simple terms, if...



					www.askaboutmoney.com


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## Cavangal (8 Jan 2021)

Sarenco said:


> Could you use the €10k to further pay down the mortgage and then fix at a lower rate with your existing provider?


I will look into this thank you


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## TheBig40 (8 Jan 2021)

Cavangal said:


> Hi the original term was 35 years started mid 2010. The payment varied due to trs and stage payments. I paid €3k just last October and pay €600 per month although I think the normal payment is €450ish.


I think the maths will work out about the same. If you have some other rainy day funds and don’t “need” the 10k a lump off the outstanding balance will have a big impact especially if you carry on with the overpaying as well. It won’t let me link to it but of you google Overpayment calculator you will be able to plug your figures into it.


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## Cavangal (8 Jan 2021)

RedOnion said:


> Ah, so you're currently on their MVR.
> 
> PTSB have made better fixed rates available to existing customers.
> 2 year 3.1%
> ...


Not sure what MVR means but it's definitely 3.7%. I would not mind fixing for two or three years but I would probably have to pay the €10k off first. 
I will read the other link thanks


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## Cavangal (8 Jan 2021)

sadie said:


> If you don't have a lot of other savings then I would just save this €10k for a rainy day.
> Once it's gone into the Mortgage then it's gone and you'd need to borrow money for another big purchase such as a car or some home improvement or repair.


Hi i have an emergency fund. This is just funds I had no plans for.


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## Sarenco (8 Jan 2021)

If you paid €10k off your mortgage (without changing the term) and fixed for, say, three years you would materially decrease your monthly expenses.

Definitely worth considering from a lifestyle perspective.


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## Cavangal (9 Jan 2021)

Sarenco said:


> If you paid €10k off your mortgage (without changing the term) and fixed for, say, three years you would materially decrease your monthly expenses.
> 
> Definitely worth considering from a lifestyle perspective.


I never thought of it in that way. Is there a way of working out the difference?


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## TheBig40 (9 Jan 2021)

Cavangal said:


> I never thought of it in that way. Is there a way of working out the difference?


You could also decrease the total amount and carry on with your current overpayment plan.


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## Cavangal (9 Jan 2021)

TheBig40 said:


> You could also decrease the total amount and carry on with your current overpayment plan.  View attachment 5225View attachment 5226


Thank you very much for that. I would like to clear it asap but as comfortably as I can. 
Another way I was thinking would be to hold back say €4k to go with my other funds, pay €6k off mortgage and increase the overpayment to €200 making the monthly payments €650.
I would be comfortable with that. What way would that leave the term?


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## FANTANA (9 Jan 2021)

I’m currently fixed with ptsb until Oct 21 at 3.3% could I call them up and ask for a lower rate?


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## RedOnion (9 Jan 2021)

@Cavangal 
Balance of 80k, reduce interest rate to 3.1%. Repayments of 650 per month would have it paid off in 12.5 years.


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## Cavangal (9 Jan 2021)

RedOnion said:


> @Cavangal
> Balance of 80k, reduce interest rate to 3.1%. Repayments of 650 per month would have it paid off in 12.5 years.


Is that fixed?


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## TheBig40 (9 Jan 2021)

Cavangal said:


> Thank you very much for that. I would like to clear it asap but as comfortably as I can.
> Another way I was thinking would be to hold back say €4k to go with my other funds, pay €6k off mortgage and increase the overpayment to €200 making the monthly payments €650.
> I would be comfortable with that. What way would that leave the term?







__





						Extra mortgage payments calculator - CCPC
					

Paying extra off your mortgage




					www.ccpc.ie
				




you can play around with your figures using the calculator in the link and you will see what the 6/10k difference is and with your overpayments.

I went through this when I moved the mortgage last year it’s a bit of a balancing act between having a reserve and knowing you’ve very little left in home loans


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## RedOnion (9 Jan 2021)

Cavangal said:


> Is that fixed?


Yes, that's using fixed rate.


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## Cavangal (9 Jan 2021)

FANTANA said:


> I’m currently fixed with ptsb until Oct 21 at 3.3% could I call them up and ask for a lower rate?


Hi was there much work involved in fixing? I have only ever been variable.


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## Cavangal (9 Jan 2021)

RedOnion said:


> Yes, that's using fixed rate.


Thank you


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## RedOnion (9 Jan 2021)

Cavangal said:


> Hi was there much work involved in fixing? I have only ever been variable.


Just phone them and ask. I think there's a form to fill in, but I can't find it.

They should include your rate options along with your annual mortgage statement.

(Edited to remove reference to fee which no longer exists)


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## FANTANA (9 Jan 2021)

Cavangal said:


> Hi was there much work involved in fixing? I have only ever been variable.



No was very easy, I was already coming to the end of my previous fix so they wrote to me with the options. I just picked which one I wanted and sent the form back to them. There was no fee to pay.


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## RedOnion (9 Jan 2021)

FANTANA said:


> There was no fee to pay.


Thanks, I've removed reference above.

I had to go double check, and they've removed it from their terms & conditions.


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## Cavangal (9 Jan 2021)

FANTANA said:


> No was very easy, I was already coming to the end of my previous fix so they wrote to me with the options. I just picked which one I wanted and sent the form back to them. There was no fee to pay.


Thanks


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## Cavangal (9 Jan 2021)

RedOnion said:


> Just phone them and ask. I think there's a form to fill in, but I can't find it.
> 
> They should include your rate options along with your annual mortgage statement.
> 
> (Edited to remove reference to fee which no longer exists)


I will call next week. If you find the form please let me know.


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## Cavangal (22 Mar 2022)

Hi everyone I'm back with another question. 
I have a little fund gathered again and I am wondering if I should keep tackling the mortgage or something else? With rising energy costs I was thinking about solar PV panels. 
My current mortgage balance is €76k variable @3.7%. I have the option to fix for 2 years @3.1% but didn't fix in case I wanted to pay more off it.


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## jim (22 Mar 2022)

Seems like a very high rate. Why not switch asap?


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## Cavangal (22 Mar 2022)

jim said:


> Seems like a very high rate. Why not switch asap?


I am not in a position to switch to another lender as I am not currently considered employed.


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## Cavangal (25 Mar 2022)

Would anyone have an opinion on mortgage or solar?


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## peemac (19 Apr 2022)

Cavangal said:


> Would anyone have an opinion on mortgage or solar?


Mortgage.

To get a return on solar you would need to be maximising use for 15-20 years.

Energy prices go up and down constantly. They will drop again.

I'd pay down the mortgage.

I'd also make sure to change energy supplier if you have not changed in the past 12 months (,and do it every year) This can save 30%+ on your electricity unit costs.


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## bob1577 (30 Jun 2022)

I paid a lump sum off my mortgage then I moved from a AIB variable rate of 3% to a fixed of 2.35% for 4 years. If I save up money now in next few years which seems unlikely with soaring fuel, heating, electricity i can then pay that off again once i come off fixed to a variable. Then fix again a few months later. You CAVANGAl might consider that option as well.


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