so whats your overall rate you are paying on the mortage? 5.25%? would you not fix for a lower rate?I have a tracker mortgage (1.25% ECB rate) with 18 more years left on it with €200,000 more to pay. The original mortgage was 360K. I am thinking about increasing the monthly mortgage payment amount and pay off the mortgage in max 10 years time. Is this advisable? I am currently paying about €1,500 per month without any arrears till now.
The main reason is myself and my wife would like to retire early at 60.
Also if the above is Ok, which is better - shall I increase the monthly mortgage payment or save money and pay in bulk once in a a while?
Any advice welcome. Thanks...
I increase the monthly mortgage payment or save money and pay in bulk once in a a while?
so whats your overall rate you are paying on the mortage? 5.25%? would you not fix for a lower rate?
and to your original query the earlier you pay the earlier you save the interest charge.
but you are paying a lot more interest than you need to at the moment, so you are taking a bet on interest rates coming way down. Without a tracker i'm fixed at 2.2% and others at 1.95%, im not sure a 1.25% tracker is that valuable.There are no more tracker mortgages available now. So if I change from my current plan I would have to go for variable or fixed rate mortgage plans, which I dont want to do.
but you are paying a lot more interest than you need to at the moment, so you are taking a bet on interest rates coming way down. Without a tracker i'm fixed at 2.2% and others at 1.95%, im not sure a 1.25% tracker is that valuable.
You are currently paying ECB (4.25%) + 1.25% = 5.5%.
The ECB rate is expected to fall. If it falls to 3% you will be paying 4.25% but probably not for another year or two.
Here are the BoI fixed rates
View attachment 8985
The 1.25% has some value. I certainly wouldn't give it up to fix for a year or two.
In your particular case as you intend to overpay, then you should stay on your tracker, as there is no penalty for overpayment.
If you fixed for 10 years and then wanted to overpay, you could face a penalty.
Brendan
The sooner you pay it off the less interest you pay.
and to your original query the earlier you pay the earlier you save the interest charge.
What? I've never had any problems doing just thisNote: AIB blocked transferring from AIB Current Account into an AIB Mortgage Account,
The sooner you pay it off the less interest you pay.
But whether you should pay it off or contribute to a pension is a different question.
There really is no basis to want to be mortgage-free in 10 years. It may well be better to have a small mortgage and a big pension in 10 years.
Brendan
There are loads of existing threads on the pension v mortgage question that you can find by searching. There's also this key post:Is it better to put 500 euro extra for mortgage payment or 500 euro as AVC every month?
There are loads of existing threads on the pension v mortgage question that you can find by searching. There's also this key post:
Key Post - Overpay mortgage or contribute to pension or do something else?
This comes up in a lot of different threads, so I will set out some principles here to kick off the discussion. I will edit it in the light of feedback. There are many options with your savings in excess of your emergency cash fund Pay down your mortgage Build up a fund to enable you to trade...www.askaboutmoney.com
I don't see how it is. It's a thread from 2020 that was updated in 2022 so hardly that old. And, as I said, there are many other similar threads in existence too.I think the information is bit outdated. So I will explain my situation here.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?