As I mentioned in deleted thread, ye seem to be over leveraging into property IMO. You dont say where you are living currently (I'm guessing renting, as you said you had just gone sale agreed), or how much the rent is, but in general, I dont see why you are buying a house now, and another one in 6-7 years. What happens if you cant sell house #1, or cant rent it out? This sounds like 2006-type buying of a starter home with the idea of selling it on later.
Im in similar-ish position (lower salary) and am planning on saving for next 6 years and buying one house outright. Im currently also contributing max AVCs for my age to pension. IMO, on 100K, you should be able to contribute into plenty into a pension and save for house as well, especially if both of ye are almost on similar money. Buying multiple houses sounds messy, getting into being a landlord merely to have a "fallback" house doesnt appeal to me at all.
You will need to give some details.
Current value of house
O/s Mortgage
Rate of interest
Earnings
Savings
Value of house to be purchased.
Current pension.
If you have a standard variable rate mortgage then it makes no sense to pay it off and then borrow at the same rate for a PPR.
If your pension collapses, keep contributing as you will be buying on sale. Pension collapsing is only a concern 10 or so years to retirement, at which time you should be moving towards more bonds anyway. At 31, you should be hoping for an equity crash, as I am at similar age.
Hi Joe,
Can you please elaborate on why it doesn't make sense? My rationale is that it's roughly equivalent to having a longer duration mortgage, split across two properties, but we would own one of them outright? Should something happen to one of us, or one of us can't work, then we always hav
Pension is nearly always superior (when done right).
Only when you own your own home, have an emergency cash fund, and have your AVCs maxed out, should you look at another property. And even then, you should look at a diversified investment portfolio, or REITs if property floats your boat.
Ok so you have a loan of €100k on your PPR there is no tax relief.
If you had a €100k on the rental property 75% of the interest is allowable.
I don't believe that you have to choose mortgage over pension. You try and do a combination of both.
Youre assuming price is always going to go up so you are buying today out of fear of tomorrow's price. As I said, you didnt indicate the rent in first post, which is why I asked. Our rent is currently E1500, but we are planning to move to another place which is E800 per month. At that price, we are saving an extra E8k per year, meaning renting for few years is a no-brainer vs interest on mortgage.
If your pension collapses, keep contributing as you will be buying on sale. Pension collapsing is only a concern 10 or so years to retirement, at which time you should be moving towards more bonds anyway. At 31, you should be hoping for an equity crash, as I am at similar age.
....Trying to convince the missus about emergency cash, she only sees how many shiny things she can buy! ....
....I've already emailed my mortgage broker about a meeting to discuss pension options .....
Ah here, 2 million private pension?!
I recently remember a thread about pensions and 1million was being used as a target, 2million seems very high.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?