Mortgage Quicker Pay Off or Regular Savings

D

Daddy

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Hello,

Have 60k in bank savings. Getting 3% gross approx.
Have 60k of mortgage paying tracker 1.5%.

Am paying the mortgage over 6 years and recently thought of extending to the term available to me being 17 years. Repayment would come down from 900 to 300 per month.

Is it a good idea to extend the term to 17 years and put the 600 i'd have left into a regular savings a/c or should I continue to pay the loan off over the 6 years.

Have commitments coming up such as third level eduction and accomodation for such for 2 kids in the next few years.

Thanks.
 
Will the lender let you extend to 17 years at the same tracker rate?
 
Thanks irish links.

Yes they will let me extend to 17 years as I originally took out the mortgage for a 20 year period and then adjusted it a cyear later telling them that I wanted to pay off quicker.
 
If I were in your shoes I think I would be inclined to pay about 30/40K off the mortgage and pay the rest off over a 4-5 yr period.I think I'd like to be mortgage free if having to pay rent for kids so not paying both at same time.
How many years until the first goes to college? How long before the next goes?
Would it be a possibility that they may look to go to the same college or city even for college?
If so or even if not but for where the first child goes to college would it be an option to buy a 2 bed apt for them using the 60 k as deposit, or a larger house where they can have lodgers in also. You could be on the look out now and maybe pick up something suitable.
Also look at how long they will be in college for - will they be doing 3,4 or perhaps 6 yrs?
Hope this gives some food for thought.
 
Interest rates are at an historical low. They are guaranteed to increase over the next 17 years. They are almost guaranteed to increase over the 6 years left in your current mortgage payment schedule.

If they stay where they are for a while, the interest offered on savings could decrease further.

If you extend your mortgage, you will end up paying a lot more than 300 a month in 10 years time.

If I was in your shoes, I would pay off the mortgage as quickly as possible and then
think about saving, based on the economic climate and interest rates at the time.
 
Thanks for the replies and food for thought.

Not sure where the kids will end up in college though 2years from now for first and 3 years for second.
 
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