Extending Mortgage term to fund children's education.

Figrus

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15
It is a mad system. We had a college fund started when our kids were tiny. Sans recession, we would have saved enough and payed off our mortgage before they started. We are public sector and took a 40 percent paycut (overtime also stopped), which was never reinstated. So saving for college was minimal. It was a happy day when we realised we qualified for susi.

Maybe your wife could give up work and study alongside them too, with susi help too, if she doesn't already have a degree.
 

Allpartied

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45
Same here, both of us public sector. I'm on a good salary, no doubt. But my mortgage was set in 2005, Celtic Tiger height, my wages then were sufficient to meet my mortgage and put away some cash for college costs. As you say, big wage drop, big tax hike, child benefit cut and mortgage unmoved.
My mortgage still takes a much bigger chunk of my monthly salary than it did in 2005 and we have prioritized paying it. We are not alone, of course, plenty in this situation, plenty even worse off, but it's unprecedented really for mortgage holders to spend 15-20 years paying off a loan which is becoming more burdensome as time goes by, certainly over 20 years.

My wife has a nursing/midwifery qualification and nearly 30 years experience. To be honest, I think we would be better off if she chucked it in and did a bit of CIH childcare in the locality, but it's a real pity for such highly skilled staff to be in that situation.
 

Figrus

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15
We are putting are heads down and finishing paying off our mortgage in 5 years as planned in 2000. This will free up €900/month, which was always earmarked to pay for child no. 3 education. We will reassess then as I may want to reenter job market . In the meantime, thank God for susi.

Incidentally, I know many PAYE workers who have to refuse extra shifts/days as earning too much would impact on their kid's grant.
 

Bronte

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13,603
Have you entered figures into the susi website? Two children attending college away from home would be awarded circa €13,000. Maybe you or your wife could consider dropping work days the year before they start in order to qualify?

We have children in college who live away from home . They live in student accommodation (€4500). They come home every weekend (approx €15 return). So don't allow them study miles away as weekly transport costs will rocket. They spend €20/month on phone. They are sent back with around €25 of aldi/lidl groceries each. They buy vodka (€8). And we transfer over €20 per week for miscellaneous (taxis to clubs, coffee, house gets takeaway etc). Text book costs are minuscule but that may be their courses University term times are remarkably short so that is a saving too. They also have parttime jobs.
Is this correct:

Fees: €3000
Accommodation: €4500
Travel €15 X 35 weeks = €525
Food €25 X 35 weeks = € 875
Phone €20 X 9 months = €180
Pocket money €20 X 35 = €700
Books: ?
Total = €9780

(52 weeks in the year. Less summer June to August of 13 weeks, 2 weeks Xmas, 2 weeks Easter, is their mid term in university?)

What groceries do you buy for them?
I presume that is a house share arrangement. If that were Dublin how much would it cost. Maybe it is Dublin.

Is there tax relief available on any of that.
 

Bronte

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13,603
My mortgage still takes a much bigger chunk of my monthly salary than it did in 2005 and we have prioritized paying it. We are not alone, of course, plenty in this situation, plenty even worse off, but it's unprecedented really for mortgage holders to spend 15-20 years paying off a loan which is becoming more burdensome as time goes by, certainly over 20 years.
Are you actually wise to prioritise paying it though? I'm confused about the 15 to 20 years, that's a pretty small amount of time.
 

Figrus

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35 weeks is correct. There is no midterm. Student is in galway.

Fees:€3000
Accommodation:€4500 (student accommodation village. Shared house (4people). Single room , shared bathroom. Next year accommodation is €3500 as student will be in a twin room ensuite.)
Travel: €15 x 35 weeks €525
Food:€25 x 35 weeks €875
Phone :€20 ×9 months €180
Pocket money: €20 x 35 €700
Books/ compulsory day trips, equipment etc €400
Total: €10180

Susi:
Full tuition fees: €3000
Full maintenance grant (more than 45km distance: €3025
Total:€6025

Shortfall:€4155

Student worked Saturday s (sesaonal) nd earned circa €1200. This was spent on clothes etc and some is saved to pay for driving lessons. Student has a summer job.
 

Figrus

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15
No idea if there is tax relief. I simplified it by implying we only have one student in college. The first year is a learning curve. Food bill decrease as time goes on as they learn to cook fast and economically (copying each other in house and having kitty for toilet paper etc). Our food bill at home lessens as we are feeding less.

Travel home varies as they cage lifts from parents and friend's parents and figure out price differences between bus companies and trains, student discounts and prebooking online.
 

Figrus

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We don't pay fees though. Susi pays college directly. And then transfers over maintenance grant to student's account every month for 9 months. We do a direct debit out of her account into our account to pay for accommodation (two lump sums in August and December).
 

Bronte

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13,603
Assuming it's qualifying course, you get 20% relief on the amount in excess of 3k per year. In practice no relief on 1st students fees, and 20% thereafter.
20% of what? Fees? As I understand it the 3K fee isn't called a Fee.
 

Bronte

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13,603
Thanks Figrus for the detail. I googled but could only get charts/graphs from Insurance companies who were trying to sell college saving schemes. Cold hard figures are much better. Will your children go abroad to work during the summer? Or have a summer job in Ireland now there's full employment? My sister tells me it's too costly to go to America like we did back in the day.
 

Figrus

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15
You are welcome. I could never find exact figures either. Ten grand a year is bandied around as the college cost for a student to live away from home and it has proved to be accurate. We could tighten up her allowance and food bill but it is not worth the hassle and arguments. Plus I like to know she has some money in her account to get a taxi home or buy phone credit if she is stranded.

As an aside, my niece attends trinity and cycles to college from the family home. It costs my brother the same as us to send her to college even though we get the full susi college grant.

However, there is the argument that they get the full college experience if they live away from home!!

Daughter has a work placement in Ireland this year so wont be travelling abroad. She will put the money she earns towards driving lessons/insurance because we live rurally and have no public transport around. So she is mad keen to be independent on holidays etc.....

If I had a crystal ball, I would maybe have chosen to live elsewhere....But if I was rich and canny enough, life would be a financial breeze no matter where we lived.
 

demoivre

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2,595
20% of what? Fees? As I understand it the 3K fee isn't called a Fee.
It is a student contribution charge. EU students studying in the EU don't pay fees as it's fees free first time around. There are several different levels of grant which depend, in the main, on income levels. So while some folks might not qualify for a full maintenance grant they may get a part maintenance grant, or if not some or all of the student contribution charge might be paid by SUSI. More here.
 

Allpartied

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Messages
45
Are you actually wise to prioritise paying it though? I'm confused about the 15 to 20 years, that's a pretty small amount of time.
Well, we thought paying the mortgage, every month and on time was best. It's the biggest debt and it is a secured debt so there is a risk of losing the asset if you don't pay.
At this stage i am thinking of not prioritizing this debt and trying to arrange an interest only payment for the college years. Then paying off the remainder of the mortgage loan with a chunk of the retirement lump sum.

We originally mortgaged in 1998, a 25 year mortgage with Irish Nationwide, I was 32 and my wife 30, then we remortgaged in 2005. The remortgage was to buy a bigger house after the children were born. Second mortgage was for 20 years, so we have 6 years to go. I didn't want to be paying a mortgage in my 60's and still don't intend to.

My point was that the experience in 2005 was that if you mortgaged, that mortgage became a smaller debt as time passed by. Inflation and pay rises, meant that most people, after 10-15 years would find the mortgage would not be that burdensome. My older sister bought her family size house in 1985, in London, for 30k, with a 25 year mortgage. After 20 years, paying a 30k mortgage in 2005 was like paying a car loan, except much cheaper. That's not the case for mortgage holders now. It is looking quite likely that these mortgages will continue to be an extremely high slice of people's salary every year, for the whole of the mortgage.
 

Allpartied

Registered User
Messages
45
35 weeks is correct. There is no midterm. Student is in galway.

Fees:€3000
Accommodation:€4500 (student accommodation village. Shared house (4people). Single room , shared bathroom. Next year accommodation is €3500 as student will be in a twin room ensuite.)
Travel: €15 x 35 weeks €525
Food:€25 x 35 weeks €875
Phone :€20 ×9 months €180
Pocket money: €20 x 35 €700
Books/ compulsory day trips, equipment etc €400
Total: €10180

Susi:
Full tuition fees: €3000
Full maintenance grant (more than 45km distance: €3025
Total:€6025

Shortfall:€4155

Student worked Saturday s (sesaonal) nd earned circa €1200. This was spent on clothes etc and some is saved to pay for driving lessons. Student has a summer job.
Thanks for that Figrus. I will be on a similar budget for my crew. We have 4, all very close together. We won't get SUSI funding, at least not initially, so it will be

2019/20 1 college = 10000

2020/21 1 at college= 9000 (hopefully cheaper accomodation)

2021/22 2 at college = 18000
- SUSI assistance= 60000 (student registration fee only)

Total req = 12000

2022/23 3 at college =25000
- SUSI assistance = 18075 ( student reg fees and maintanence of 3025 per child)

Total requ = 7000 approx

2022/23 3 at college, as above.

2023/24 3 at college, as above

2024/25 2 at college = 12000 required

2025/26 1 at college = 10000

So, total required, for the whole period is, optimistically, 73000 Euros, and that is with SUSI assistance, which I'm not absolutely sure I will get. My current savings available is 40k, so I have a 30k deficit to fund these years. Hence my plan to reduce mortgage payments by either reverting to interest only, or extending the term for as long as possible. Hopefully, they will be able to earn a few quid themselves each summer (maybe 2k each), which would certainly help to bridge the gaps. They do have a good work ethic and the older ones are already working in local restaurants on the weekend, so that will have to continue.
 

demoivre

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Messages
2,595
Ten grand a year is bandied around as the college cost for a student to live away from home and it has proved to be accurate
€10 to 12k is a fair enough estimate when they are not living at home and in college in Dublin. I've put two through in that scenario and have another two there at the moment. Roughly :

2x Student Contribution charge @ 3,000 = 6,000
2x 600 rent pm x 9 months =10800 Each has their own room but sharing a room can reduce this.
2x 70 per week pocket money x 35 weeks = 4900
Total =21700

The weekly spend is realistically closer to €100 per week as we buy them food to bring back when they're home at the weekend. There is a student centre levy in UCD of €250 pa which I didn't include , and is not covered by any grant if your lucky enough to qualify.
 

Figrus

Registered User
Messages
15
You are welcome, allpartied. Depending on the personality of your oldest, seriously consider putting them into a shared twin room with a stranger from day 1. And save the €1000 (or €1500 with no ensuite). The student accommodation match 1st years with 1st years. And they step in to sort any serious complaints. We didnt realise how many students shared with strangers , presumably for financial reasons or because they were late to apply for accommodation. And they all seem to have got on grand.
 
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