Pay an extra €150 a month off my mortgage or into an AVC??

Hi all

My car loan is finally finishing up at the end of the year and I’ll have an extra €150 per month. I don’t simply want to waste this so I’d be willing to use it to pay a little extra off my mortgage or into a pension fund. The question is, which should I do??

I’m married and my wife works. She has a good pension.
I’m 32 and have a small pension built up from my company – nothing special, so would €150 p/m (€250 before tax?) would help here
I’ve 22 years to go on a 25 year €200k mortgage. It’s at a good rate with an Ulster Bank tracker

I just don’t know which option would be better in the long run. Any advice greatly appreciated!!

Thanks

WIth the pension, you'll get the benefit of the substantial tax break. The downside is that the money is tied up until you retire - very few exceptions.

If you're thinking that you might need the money before you retire (trading up property, kids), paying off the mortgage means that you can still access it by topping up your mortgage (subject to approvals) if you really need it.

Are you already maximising your SSIA?

Thanks guys

Yes - I've got a SISA that will mature next year. I’m simply looking for some wise way to use a little surplus cash. The main thing that I’m not sure about is what would be better in the long run - the savings on mortgage repayments or the size of a final pension.

The tax break on the pension would make a huge difference to the value in the long. It's definitely the better option financially, if you live with the money being tied up to retirement.