Warning Note: All lump sum payments must be applied firstly to the Split Loan Account. If the amount of the lump sum payment is greater than the balance required to fully redeem the Split Loan Account, the remainder of the lump sum payment will then be applied to the Base Loan Account(s).
Stay on the tracker and pay your savings off the active mortgage as you accumulate them. No need at all to wait for two years and pay off a lump sum. (This didn't matter so much when the rate was 0.75% but it does matter now.)have 50 k savings at the moment and probably the same again in 2 more years.
Are you sure you've got this right?If you pay it off the active part of the loan you will save 3.75% for 8 years. That will save you about €17,000 interest over the remaining 8 years. (The 3.75% could go up or down, but it's the best rate to use to do the comparisons.)
Are you sure you've got this right?
And if @Hesseny parked their €50k now in a high-yielding savings account (with a term of 18 months or less), they might make an extra €3,000 over the next 18 months.
€50k now in a high-yielding savings account (with a term of 18 months or less), they might make an extra €3,000 over the next 18 months.
Yes, that's what I was getting at when I mentioned the approximation (because I thought that you had used €50,000 x 4.25/100 x 8 = €17,000 to arrive at €17k). Either way, the reducing balance has to be factored in, which is why approximations won't do here.The paying it off the active mortgage assumed a return of 3.75% for the full 8 years. But if you pay it off and then another €50k, you would not be getting a return of 3.75% for the full 8 years.
Oops, yeah, 2.68% looks like the best rate for 18 months (not 3%). But DIRT is now 33%. So, we're looking at about €1,340 in net interest over 18 months. I was thinking that @Hesseny had €100k right now for some reason.50 @2.68% = €1,340 less tax (40%?) = €800 per year or €1,200 for 18months.
the reducing balance has to be factored in, which is why approximations won't do here
But DIRT is now 33%
I thought (assumed!) that the only tax liability on such deposits for an Irish resident was DIRT. Perhaps it's not as simple as that.I have no idea how these foreign deposits are taxed. But we don't need to know exactly. Approximations will do.
50000*(1.0375)^8 = €67,123.40
It's compounding the interest saving.
the reducing balance has to be factored in, which is why approximations won't do here
But I just worked out the interest compounded on the €50k , which is the corollary of the reducing balance.
Almost certain that the warehouse bonus is 20% and not 25%
No. It's not due until the 8 years is up.If @Hesseny cleared their tracker mortgage in 5 years, would the warehoused part then become due immediately?
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