Hi, not sure if this should go under makeover section as such. I'm wondering if there is a method to calculate the best way to choose where to put some extra cash? Choice is either AVCs or pay a lump towards mortgage. Let's say I have €30k.
I have a €300k mortgage that I hope to pay off in 10 years. Variable at around 3%. If I paid the €30k off it, the total interest would come down from €49k to €44k over 10 years. Saving of €5k. I used https://www.drcalculator.com/mortgage/ to calculate the interest.
My pension was started 5 years ago, I contribute 5% (€3500 per year) and the company matches it. If I start paying AVCs, the employer doesnt match that portion, but I am saving the tax on it. That would be at the higher rate of tax. So I could start paying an extra 5% a year, and save myself €1400 in tax per year. So my €30k towards AVCs would save me around €11k over the 8-10 years.
So the AVCs seem like the way to go. Am I correct there?
Age: 39
Spouse’s/Partner's age: 39
Annual gross income from employment or profession: 70000
Annual gross income of spouse: 55000
Type of employment: both private
In general are you:
(a) spending more than you earn, or
(b) saving?
(b) Saving.
Rough estimate of value of home: 700000
Amount outstanding on your mortgage: 300000
What interest rate are you paying? 3% variable over 10 years
Do you have a pension scheme? Contributions of 5% salary matched by 5% from employer
I have a €300k mortgage that I hope to pay off in 10 years. Variable at around 3%. If I paid the €30k off it, the total interest would come down from €49k to €44k over 10 years. Saving of €5k. I used https://www.drcalculator.com/mortgage/ to calculate the interest.
My pension was started 5 years ago, I contribute 5% (€3500 per year) and the company matches it. If I start paying AVCs, the employer doesnt match that portion, but I am saving the tax on it. That would be at the higher rate of tax. So I could start paying an extra 5% a year, and save myself €1400 in tax per year. So my €30k towards AVCs would save me around €11k over the 8-10 years.
So the AVCs seem like the way to go. Am I correct there?
Age: 39
Spouse’s/Partner's age: 39
Annual gross income from employment or profession: 70000
Annual gross income of spouse: 55000
Type of employment: both private
In general are you:
(a) spending more than you earn, or
(b) saving?
(b) Saving.
Rough estimate of value of home: 700000
Amount outstanding on your mortgage: 300000
What interest rate are you paying? 3% variable over 10 years
Do you have a pension scheme? Contributions of 5% salary matched by 5% from employer