Pay down tracker mortgage or save?

[Slim]

Hi

This is a question I have often considered. We are fortunate to have a tracker mortgage and the repayment has been declining in line with ECB rates. We have a modest mortgage balance, about €50k and about 7 years left to pay. Monthly repayment is about €646(before latest reduction). I don't expect the payment to drop much. Question is, would it be worth it paying extra into the mortgage account? We could pay an additional €400 pm for a while.

I may have an opportunity to retire early in next 5 years or so. In addition, we will have 2 kids in college simultaneously for 1 year in two years time plus youngest for the full 4 years, hopefully. We have savings to cover all that.

Long question short - pay down mortgage which is at lowest historical rate or save €400 pm over a few years?

 

[suzie]

I would imagine you'd get a better return on saving the €400 pm somewhere as the tracker interest so so low at the moment. It also means you will have the money over than time if the case arises that you will need it for something else.

S.

 

[twofor1]

Hi
Long question short - pay down mortgage which is at lowest historical rate or save €400 pm over a few years?

Lots of info here; http://www.askaboutmoney.com/showthread.php?t=101819

Through overpayments I recently paid off my low tracker, in these uncertain times even with state guarantees from different countries, who knows what could happen, I became increasingly uneasy with having savings while still having debt.

I think the financial advantage of saving is outweighed by the security of lower debt, many here would disagree, but I have no regrets.

Paying off the mortgage also enabled me to cancel the mortgage protection policy, which will save a significant amount annually.

 

[Slim]

Thanks both posters. Good link, I should have checked more thoroughly. It seems to answer my queries. I will try to close this thread?