Hi,
My wife and I are first time buyers and need some advice from those more financially savy than ourselves. We have savings of €175K and have gone Sale Agreed on a house for €275K. We are trying to determine what deposit to put on and what size of a mortgage to take out.
From researching on mortgages.ie, I think we should try to get a LTV ratio of less than 50% to get a good interest rate. This would mean a mortgage of €137,000. We plan on taking out a 33 year variable mortgage but overpay (~€1,000 to €1,300 a month) to hopefully clear it off in 10 to 15 years. We'd leave ~$8,000 for the other fees (solicitor, stamp duty, surveyor etc.).
We plan on spending around €20,000 on the house itself afterwards which would leave us with €10,000 remaining for a rainy day. We plan on having kids in next year or two also so need to factor in the increased expenditure around that time. My questions are:
- Do we have the right strategy with the deposit? Should we decrease it or leave as is?
- Is the general feeling that it is better to go with a variable mortgage or should we fix a portion of it?
- Is overpaying the mortgage to clear it off ASAP the right approach?
- All other recommendations are welcome
Age: 32
Spouse’s/Partner's age: 31
Annual gross income from employment or profession: €52,000 plus average bonus of €10,000
Annual gross income of spouse: €51,000
Type of employment: Both in full time employment in private sector
In general are you:
(a) spending more than you earn, or
(b) saving? Saving around €2,000 per month between us today. Current rent is €775 in total per month but we will have increased maintenance costs now associating with owning a home plus extra commuting costs will also eat into this
Other borrowings – car loans/personal loans etc. None
Do you pay off your full credit card balance each month? Yes
Savings and investments: €175,000 on deposit between us plus ~€25,000 in shares
Do you have a pension scheme? Yes both of us have a pension
Do you own any investment or other property? No
Ages of children: No children but hope to start a family soon