pay mortgage now or wait

P

portlaire

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My wife bought and sold a house a few years backs (before we were married), we have a nice lump sum of money sitting in the bank from the sale profits. I also bought a house a couple of years back which we now live in and are paying a mortgage on (fixed rate loan). We have received planning permission for a house we intend to start building this year, within the next 3 months. I'm not sure if we should take the lump sum and use it to reduce my current mortgage and get another mortgage for the house we are intending to build or should we keep the lump sum use it to get by for as long as we can with the build and get a small mortgage later to complete the build. We intend to rent our current house once we move to the new build.
Appreciate any advice.
 
If you're wanting to repay a lump sum off a fixed rate mortgage, you may incur fees/penalties.
 
Just called them - there would be no cost (or very little - maybe €50) in paying a lump sum or increasing my monthly payments.
 
In the current climate I would say hold on to your cash - who knows how tight the banks will get when lending money a few months from now. There's no guarantee they'd lend you as much as you'll need. As they say, 'cash is king'.
 
If you intend letting your house you can offset the interest on the mortgage (along with other expenses) against the rental income to reduce your so there is no point in reducing that loan. Use your cash for the new build.

Sarah W

www.mortgagesoverseas.com
 
It would be better to have the bulk of your mortgage on your principal private residence as you cannot claim TRS on an investment property.
 
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