I have posted previously about our situation but we have now been formally offered a split mortgage. We are unsure of how to proceed and would love some advice. Our details are as follows.
Personal and income details
Net (i.e. after tax) Income self: €1613 pm part time employment, private sector
Income history: Have been working a 3 day week but have recently secured an extra day's work a week.
Net income partner/spouse: c. €1573 pm, full time employment, private sector
Income history: Lost job about 5 years ago, has been in and out of low paying jobs since. This one is secure enough but the pay is low.
Number of children 1
Amount of Mortgage Interest Supplement received N/A
Home loan
Lender: PTSB
Amount outstanding: €257,453.99
Value of home: c. €120,000
Interest rate: Variable 4.34%
Monthly repayment: Should be €1,279 after TRS, currently paying €930 (interest €797 + capital 133)
Amount in arrears None
Summary of discussions and agreements with the bank
We have been making reduced payments as agreed with the bank for the past couple of years, usually interest only and lately interest only plus capital. The bank have now offered us a split mortgage as detailed below.
Mortage Balance €257,453.99
Split offer;
Main mortgage account €174,876.85 @ 4.34%
Warehouse account €82,577.14 @ 0%
Monthly repayment amount €820.59
Term to be increased by 112 months.
Current remaining term 295 months.
Other loans and creditors
Overdraft – AIB €1,000
PTSB €500
Credit Card €1500
Credit Union e.g. Loan of €6,500 against €150 shares. Currently paying €225 per month off loan and €10 to shares. 2.5 years left.
Family Loan from family member balance €8,510 – try to pay at least €150 pm back. Interest free, no formal arrangement in place.
Other savings and investments
None. Try to put away €10 a week to cover Christmas, birthdays etc.
Any other relevant information
Childcare €260 pm (starting this month, we haven't had this cost up to now).
The offer to pay less per month is instantly appealing but we don't want to accept until we are fully sure we are making the right decision.
Our thoughts are that we accept the offer and pay the lesser amount for a few years while we are clearing our short term debt and therefore leaving us with more disposable income each month. We would then ask the bank to transfer the money back from the warehouse account to the main mortgage account. We really want to pay it off over the years rather than retire owning thousands.
All/any advice appreciated. Thanks in advance.
Personal and income details
Net (i.e. after tax) Income self: €1613 pm part time employment, private sector
Income history: Have been working a 3 day week but have recently secured an extra day's work a week.
Net income partner/spouse: c. €1573 pm, full time employment, private sector
Income history: Lost job about 5 years ago, has been in and out of low paying jobs since. This one is secure enough but the pay is low.
Number of children 1
Amount of Mortgage Interest Supplement received N/A
Home loan
Lender: PTSB
Amount outstanding: €257,453.99
Value of home: c. €120,000
Interest rate: Variable 4.34%
Monthly repayment: Should be €1,279 after TRS, currently paying €930 (interest €797 + capital 133)
Amount in arrears None
Summary of discussions and agreements with the bank
We have been making reduced payments as agreed with the bank for the past couple of years, usually interest only and lately interest only plus capital. The bank have now offered us a split mortgage as detailed below.
Mortage Balance €257,453.99
Split offer;
Main mortgage account €174,876.85 @ 4.34%
Warehouse account €82,577.14 @ 0%
Monthly repayment amount €820.59
Term to be increased by 112 months.
Current remaining term 295 months.
Other loans and creditors
Overdraft – AIB €1,000
PTSB €500
Credit Card €1500
Credit Union e.g. Loan of €6,500 against €150 shares. Currently paying €225 per month off loan and €10 to shares. 2.5 years left.
Family Loan from family member balance €8,510 – try to pay at least €150 pm back. Interest free, no formal arrangement in place.
Other savings and investments
None. Try to put away €10 a week to cover Christmas, birthdays etc.
Any other relevant information
Childcare €260 pm (starting this month, we haven't had this cost up to now).
The offer to pay less per month is instantly appealing but we don't want to accept until we are fully sure we are making the right decision.
Our thoughts are that we accept the offer and pay the lesser amount for a few years while we are clearing our short term debt and therefore leaving us with more disposable income each month. We would then ask the bank to transfer the money back from the warehouse account to the main mortgage account. We really want to pay it off over the years rather than retire owning thousands.
All/any advice appreciated. Thanks in advance.