Does It Make sense to pay a 170K Inheritance off a 380K Mortgage in Negative Equity?

[Ireland.1]

Hello


We would appreciate the expertise on this site please?


We have a mortgage of 380K on a property now valued at 175K, most recently valued by a reputable estate agent in December 2013.


We have an inheritance of 170K. Is it silly to offset the 170K off our heavily indebted home?

 

[vandriver]

What interest rate is your mortgage?

 

[MrEarl]

Can you afford your current level of loan repayment and would you still be able to afford them, if they increased by say 10-15% per month ?

If the answer is yes, then depending on other factors such as the interest rate charged (as vandriver is no doubt thinking of) it may be appropriate to save some or all of the 170k away somewhere.

If the answer is no, then you need to consider reducing your mortgage (if you do decide to do this, ensure the bank is clear that you want to retain your current loan term, but reduce your monthly repayment obligations - at your own descretion, you can always overpay afterwards, but if you make a voluntary lump sum payment then you should get the flexibiliy in my view).