Extending Mortgage term to fund children's education.

[Bronte]

Allpartied what you say about the facts of mortgages hold true if you had like your sister stayed in the original house. You’re making zero allowance for the fact you upgraded to a larger house. I’m in the same situation, albeit owning the origins house outright as it’s term ended. But the cost of that was minuscule in today’s terms when I compare it to what I’m paying for our current home. But this asset is going to be worth a lot more than our previous first home in Ireland.

Not sure I’d agree with you about paying the mortgage into your sixties. Particularly if you are going to be earning and if you’re cash poor now to fund the education.

 

[Bronte]

€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.

Great to have more actual experiences. We are looking at options and countries. In Ireland it is clear Dublin is the most expensive. Can you elaborate on the accommodation, particularly as regards first year. If you prefer not to say location, could you pm me. I had a look at what Trinity offers, seems like about 7k.

Are you getting tax relief?

And I’m guessing Figrus is talking about Corrib village. But maybe not.

 

[misemoi]

A little OT but if any of your children are interested in studying for accounting or insurance, I have seen some school leaver apprenticeships that allow for part time study to get qualifications. The Central Bank also do one where they pay you a salary and a Business Degree is funded. Not massive salaries I'm sure for Dublin but an alternative with a long term career path.

 

[Figrus]

https://www.corriboil.com/free_student_accommodation_competition/

Corrib oil ran a competition last year to win free student accommodation. They researched approximately how much it is for student rent in each county
As per link above.

 

[Figrus]

I have heard from friends that there isn't a huge difference in the price of student accommodation between Dublin, cork, limerick and galway. However, most students like to return home at weekends and it is that weekly train/bus fare between home and college which can impact hugely on college budgets.

 

[Allpartied]

Allpartied what you say about the facts of mortgages hold true if you had like your sister stayed in the original house. You’re making zero allowance for the fact you upgraded to a larger house. I’m in the same situation, albeit owning the origins house outright as it’s term ended. But the cost of that was minuscule in today’s terms when I compare it to what I’m paying for our current home. But this asset is going to be worth a lot more than our previous first home in Ireland.

Not sure I’d agree with you about paying the mortgage into your sixties. Particularly if you are going to be earning and if you’re cash poor now to fund the education.

Well, although I moved from one house to another, I also moved location. So the mortgage stayed the same, with a slight adjustment on the term.

There is nobody, nobody, not one single soul in this country who took out a first mortgage in the first few years of this century, sitting on the kind of asset accumulation which those who mortgaged in the 80's or early 90's were sitting on after 20 years.

I've explained how I intend to manage the cash flow in the next few years. I will maximise my tax free lump sum, which, incidentally, will make my eligible for SUSI assistance. I will apply for interest only period, or extend the mortgage for the maximum period allowable. I will then use the tax free lump sum at 60 to pay off the remainder of the mortgage.

 

[Allpartied]

I have heard from friends that there isn't a huge difference in the price of student accommodation between Dublin, cork, limerick and galway. However, most students like to return home at weekends and it is that weekly train/bus fare between home and college which can impact hugely on college budgets.

2 bed apartments in Limerick are renting for around 1100 per month, 2 bed apartments in Dublin (North inner city) are renting at 2300 euro plus.

On campus Student accomodation is also more expensive in Dublin, by a considerable margin, which I think is a bit cheeky.

But yes, the weekly trip back could get pricey. Maybe the could make friends with someone who drives and lives nearby.

 

[noproblem]

2 bed apartments in Limerick are renting for around 1100 per month, 2 bed apartments in Dublin (North inner city) are renting at 2300 euro plus.

On campus Student accomodation is also more expensive in Dublin, by a considerable margin, which I think is a bit cheeky.

But yes, the weekly trip back could get pricey. Maybe the could make friends with someone who drives and lives nearby.

Do you mind me asking if there's any possibility of you inheriting anything value wise over the next few years, or have you even considered it? By the way, i'm not prying or trying to be nosey but sometimes reality in life is overlooked.

 

[lledlledlled]

My God, alarming thread. Mine are 4yrs old and 3mts, and I'm starting to think I've left it too late to save for college!
Just joking, but a lot of money obviously needs to be put aside for this period.

We're overpaying our mortgage as much as we can afford to in the hope of having smaller repayments in the future and being able to save for the college years when the kids finish primary school.

I have to main issues with my plan...
1) my overpayments are quite a struggle to meet but are relatively small. So they don't have a huge impact on reducing the next repayment due
2) how do I know when to stop the overpayments and switch to saving hard cash for college? The plan to switch after primary school is a pure guess and not based on any calculations

I live in Dublin so hopefully kids will live at home during college. Also hoping transport costs will be minimal i.e. limited to the cost of repairing a bike puncture!

 

[lledlledlled]

2 bed apartments in Limerick are renting for around 1100 per month, 2 bed apartments in Dublin (North inner city) are renting at 2300 euro plus.

On campus Student accomodation is also more expensive in Dublin, by a considerable margin, which I think is a bit cheeky.

But yes, the weekly trip back could get pricey. Maybe the could make friends with someone who drives and lives nearby.

Back when I was hanging out with students, I recall they country based ones tended to go home weekly in the first year or two, and much less frequently thereafter.
It varied depending on how far away home was and how much study the difficulty of the course involved, and how well settled they were with college friends.

Staying in digs with a family used to be a great way to transition away from home, especially for 1st yr students. It might not be as common nowadays but might be worth considering for some.

 

[demoivre]

Great to have more actual experiences. We are looking at options and countries. In Ireland it is clear Dublin is the most expensive. Can you elaborate on the accommodation, particularly as regards first year. If you prefer not to say location, could you pm me. I had a look at what Trinity offers, seems like about 7k.

Are you getting tax relief?

And I’m guessing Figrus is talking about Corrib village. But maybe not.

Tax relief is small, first €3k disregarded IIRC and then 20% of the second €3k. Some folks like to get their kids on campus in first year , especially if they aren't familiar with eg Dublin /Cork or don't have siblings there already. DCU and UCD , both of which I know well, randomly assign accommodation. My first two kids, now finished college, both got campus accommodation in first year , one in St Pats DCU , the other in UCD. St Pats DCU was around €4k back then 6 years ago , UCD was around the €6k mark, 5 years ago. UCD have several different residences and a big price variation between them which you'll find on their website. After that they got houses with fellow students, one in Drumcondra the other in Clonskeagh where they remained for the rest of college. Both houses acquired through contacts made in college. In both houses the sitting room was turned in to a bedroom to get an extra student in to reduce rent costs. Each had their own room. Rent in Drumcondra was €375 pm plus bills, in Clonskeagh it was €550pm plus bills, both 9 month contracts.

The two I have in college at present stayed in digs in First year as they didn't get offered campus accommodation in DCU or UCD initially. Glasnevin digs was €110pw , Blackrock digs was €150 pw, both 9 month contracts. Digs accommodation is typically Sunday night to Friday morning . Both remained in their respective accommodations for the first two years. The DCU student is now moving to a house in Ballymun, sharing with other students paying €600pm, plus bills , own room 12 month contract but will be working in Dublin next summer so needs the 12 month contract. UCD student remaining in Blackrock with no change to contract.


There are many variables at play in Dublin that affect rent such as Area, own room, length of contract, forgoing sitting room for extra bedroom, food included in digs, to name a few. Even with an area there can be considerable variations. Two years ago in Santry/ Glasnevin we looked at three digs accommodation with prices of €600, €550 and €440 pm. The €440 was by far the best and the closest to DCU ! I was about to pay the deposit on the €600 pm one and fortuitously discovered the €440 one , which was a nicer house and very close to the college.

Just to say digs is usually a weekly payment so the €110 pw is slightly more than €440 pm as there are more than 4 weeks in a month, but it all adds up !

Enjoy your kids

 

[Allpartied]

Do you mind me asking if there's any possibility of you inheriting anything value wise over the next few years, or have you even considered it? By the way, i'm not prying or trying to be nosey but sometimes reality in life is overlooked.

The short answer, No.
My wife's father passed away three years ago, spending the last 7 years of his life in our house, under our care. He had nothing to give us in material terms, but my children will have the memory of him being with us, telling his stories and delighting them with his prescence in their lives.
My mother in law, sadly passed away over 20 years ago.
Both my parents are still alive and in good health. They have nothing of any material value, living in a rented house and surviving on the state pension.

 

[Laughahalla]

A state run student loan option would make life a lot easier,can't imagine why it's not available here like most countries.

They have this in the USA and people are crippled with massive debt for life. Borrowing is not the answer and is definetly not the easy option.

U.S. Student Debt May Be a Crisis Now. Soon It Will Be a Catastrophe

Federal student loans are the only consumer debt segment that’s grown continuously since the Great Recession.

www.bloomberg.com

 

[Allpartied]

They have this in the USA and people are crippled with massive debt for life. Borrowing is not the answer and is definetly not the easy option.

U.S. Student Debt May Be a Crisis Now. Soon It Will Be a Catastrophe

Federal student loans are the only consumer debt segment that’s grown continuously since the Great Recession.

www.bloomberg.com

Obviously it is not a good idea to get into debt before you even start your working life. However, it is virtually impossible to go to third level education these days without going in to debt. Of course, if your parents are wealthy enough they can subsidise the cost, but not everyone is so lucky.

There are two options for people who do not have a wealthy parent to stump up 10k per year, per child.

One is to work throughout the 4 years of the course, earning the money required to fund themselves. Generally these would be min wage jobs, (currently less than 10 euros per hour), so the student would need to work an average of 22 hours per week to get the requisite 10k ( remembering that even such a low wage still brings a USC of 500 euros) . That is, of course, possible, but for many courses it would be difficult. Many technical courses, such as nursing, medicine, vet, health sciences etc, require full time attendance Mon to Fri, plus work based placements during June/July. This, in addition to course work, projects and other independent study requirements, not to mention exam preparation, would leave the individual with virtually no free time.
When I was at college, I did work a few hours a week, in a bar. It got me a few quid pocket money, but not much more. . However, I had hugely subsidised accommodation from the hospital where I studied. My accommodation costs were 10 quid a month, in central London, in 1991. Even allowing for inflation, that would equate to 18.80 pounds per month today. Imagine that!! These days accommodation costs in Dublin or London would be a multiple of hundreds.
As I was studying a health service degree, which involved hospital based placements, I also got free food, as much as I wanted, from the staff canteen. Oh, and a student grant, not means tested. It wasn't much, about 200 quid a month, but it paid for books, clothes, occasional drinks, well you know. Third level education was genuinely free, in the UK, for degrees, so there wasn't any of these "registration fees".
This sounds like heaven now, but it was pretty normal back in the bad old days. If these figures were still the norm, then a loan would be unnecessary, but the world has clearly changed.

The other alternative is a govt based loan scheme, paid back when the graduate reaches a certain income figure. This is the norm in most European countries and is, effectively, a graduate tax, payable for a period of years after graduation. I would love to see a return to the day when students received the kind of service I got back in the day, but, if not, a sensible, well regulated, govt run loan scheme would be better than the current chaos.

 

[Lord John]

Obviously it is not a good idea to get into debt before you even start your working life. However, it is virtually impossible to go to third level education these days without going in to debt. Of course, if your parents are wealthy enough they can subsidise the cost, but not everyone is so lucky.

There are two options for people who do not have a wealthy parent to stump up 10k per year, per child.

One is to work throughout the 4 years of the course, earning the money required to fund themselves. Generally these would be min wage jobs, (currently less than 10 euros per hour), so the student would need to work an average of 22 hours per week to get the requisite 10k ( remembering that even such a low wage still brings a USC of 500 euros) . That is, of course, possible, but for many courses it would be difficult. Many technical courses, such as nursing, medicine, vet, health sciences etc, require full time attendance Mon to Fri, plus work based placements during June/July. This, in addition to course work, projects and other independent study requirements, not to mention exam preparation, would leave the individual with virtually no free time.
When I was at college, I did work a few hours a week, in a bar. It got me a few quid pocket money, but not much more. . However, I had hugely subsidised accommodation from the hospital where I studied. My accommodation costs were 10 quid a month, in central London, in 1991. Even allowing for inflation, that would equate to 18.80 pounds per month today. Imagine that!! These days accommodation costs in Dublin or London would be a multiple of hundreds.
As I was studying a health service degree, which involved hospital based placements, I also got free food, as much as I wanted, from the staff canteen. Oh, and a student grant, not means tested. It wasn't much, about 200 quid a month, but it paid for books, clothes, occasional drinks, well you know. Third level education was genuinely free, in the UK, for degrees, so there wasn't any of these "registration fees".
This sounds like heaven now, but it was pretty normal back in the bad old days. If these figures were still the norm, then a loan would be unnecessary, but the world has clearly changed.

The other alternative is a govt based loan scheme, paid back when the graduate reaches a certain income figure. This is the norm in most European countries and is, effectively, a graduate tax, payable for a period of years after graduation. I would love to see a return to the day when students received the kind of service I got back in the day, but, if not, a sensible, well regulated, govt run loan scheme would be better than the current chaos.

There is no shortage of work for teenagers / kids now. Why shouldn't they work 20 hours per week to assist funding?
I have 2 children coming up to college age and while I have savings to fund them.. they will certainly work to assist.
I've agreed with my oldest that I will cover fees but she will cover rent.... be that from summer jobs or weekend...
McDonalds / Supermacs are great to learn responsibility and money management.

Any kid who wants to have their parents fund their college life needs to grow up.
Any parent who thinks their snowflake should be given 10K per year is deluded.

I did one of the most intensive courses in University, pretty much full time in engineering.
I still managed to work couple nights a week in a bar and weekends flipping burgers...

Students need to grow up and learn responsibility
Parents need to let the snowflakes grow up.

 

[Laughahalla]

Students need to grow up and learn responsibility
Parents need to let the snowflakes grow up.

I think parents need to teach their children about the value of money and how to manage money better.

For parents - Thinking about financing college when the child is about to go to college is too late. It's not as if it is a surprise that your child will get to college age eventually. You've had about 18 years notice.

 

[Allpartied]

There is no shortage of work for teenagers / kids now. Why shouldn't they work 20 hours per week to assist funding?
I have 2 children coming up to college age and while I have savings to fund them.. they will certainly work to assist.
I've agreed with my oldest that I will cover fees but she will cover rent.... be that from summer jobs or weekend...
McDonalds / Supermacs are great to learn responsibility and money management.

Any kid who wants to have their parents fund their college life needs to grow up.
Any parent who thinks their snowflake should be given 10K per year is deluded.

I did one of the most intensive courses in University, pretty much full time in engineering.
I still managed to work couple nights a week in a bar and weekends flipping burgers...

Students need to grow up and learn responsibility
Parents need to let the snowflakes grow up.

OK, good on you. All my children have a very good work ethic. The younger ones baby sitting for neighbours through the summer holiday. The eldest is already running two jobs this summer, working in a cafe and Center Parcs. Many of her Leaving Cert friends are off on an all expenses paid holiday in the sun, courtesy of wealthy parents.
There is no danger of them being snowflakes and they will all contribute to their education, certainly no pocket money for socialising is coming from us. We will sit down, carefully, with each of them and work out the best way of budgeting for those years. However, rental in Dublin is shocking. Minimum 8k for 9 months, then 3k for registration fees, that's before books, laptops, travel costs.
Make it 12k per year, per child. Then multiply by 4. and then multiply that by 4.
My original post was about extending my mortgage, so that I could assist, but be reassured we will do this together, and they will make their contribution.

 

[Allpartied]

I think parents need to teach their children about the value of money and how to manage money better.

For parents - Thinking about financing college when the child is about to go to college is too late. It's not as if it is a surprise that your child will get to college age eventually. You've had about 18 years notice.

Of course thinking about college years is good advice and saving regularly to create a fund should start as soon as the kids are born. My further advice is don't live through the worst recession in the history of the state. Don't experience a 30% drop in salary. Don't any time off work to look after terminally ill parents. Don't buy a property just before the biggest property crash in modern history.
If you can avoid these things, you should be fine.

 

[Figrus]

Well said allpartied.
And may I add, don't assume that illness wont affect the main earner in the house. And even if you think you have it covered with salary protection insurance, they only pay out 70 percent of your basic pay.

 

[Bronte]

Anybody have an idea of how much a weekly grocery bill would be for a student? Food/cleaning/toiletries. How do people organise this for their children.