Pay off Mortage now using Savings?

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kenneth12

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We have €60k left on our mortgage for 18 years. Spouse says we should use our savings now to pay this off.
This would leave us with €40k savings remaining in college fund for our teenagers.
My spouse fears Deposits might be in jeopardy of being frozen/some other calamity.
My opinion is that governments will just borrow more rather take this option and that keeping cash is better.
What should we do?
 
Pay 50k off it and reduce payments down over remaining term. Then it will be easier top it up again in the future if needs be and banks are allowing it! Keep the mortgage protection in place maybe, you can always cancel later and pay off the rest if things level out quickly. It reduces your risk but keeps the mortgage in place should you need to reborrow.
 
Thankyou. If we reduce our mortgage signicantly, should we reduce our mortgage protection amount proportionally?
We hold another separate life insurance policy as well.
 
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Not that easy sometimes reduce a mortgage protection and may not have a worthwhile effect costwise. If it's not too expensive I'd just leave it alone for now, you can always look at it again when the dust settles!
 
I would absolutely disagree with Brendan, you have €100,000 in cash. You have an obligation to pay about €300 per month for the next 18 years.

In my opinion access to cash may well become vitally important.

I think the idea of government raiding deposits is far fetched. A small levy as happened to pensions last time perhaps.

If you are still concerned about that I suggest several small accounts, they are less likely to raid small accounts, and a big mattress.
 
People are talking about meltdown. apocalypse.

I think that the fears are overstated, but you must allow for the fact that there might be a meltdown.

Therefore reduce your risk. Shares are not safe. Cash is not safe. Government bonds are not safe.

Pay off your mortgage. You will still have €40k cash.

Brendan
 
guru_wannabe said:
why paying mortgage then? banks would also collapse in that scenario?
if someone is concerned about apocalyptic meltdown why not invest in physical gold?
Click to expand...

To what end?

In such an apocalyptic scenario, when I come through your front window looking for a tin of tuna or beans, what are you going to do with that physical gold? Fashion a beautiful baseball bat-shaped weapon out of it to bludgeon me to death?

Or will you have certs related to some mine in Perth to roll up and use to poke me in the eye?

I’d love to know the type of apocalypse that gold might protect anyone from.

The OP should clear the mortgage; €40k in the bank and debt-free is a strong position to be in. Then earmark the “old” mortgage repayment amount for saving/investing/pension.
 
3/4 of the way between COVID-19 lockdown and a full Zombie Apocalypse is a point where utlities don't work, rule of law deteriorates, payments systems break down and supply chains are badly disrupted.

In this scenario gold becomes very useful as a medium of exchange. But you actually have to physically have it in your house. Not in a virtual account, not in a safe, actually physically in your possession!

Even still using it is not simple though. The problem is that you probably won't hold it in denominations small enough to be useful. You will have to pay people quite a lot to sit around and defend it too.
 
What is best if the sole income in the household goes in the next couple of weeks, which now is a real possibility.
Isn't it better to keep cash savings? And drip feed it into the mortgage if necessary?
If the job is gone - we couldn't top up our mortgage again, nor could we get a loan (eg for college) until a steady income was secured, and with 6 months probation done.
It feels better and reassuring to have re-paid the mortgage but does it make any financial sense?
 
kenneth12 said:
What is best if the sole income in the household goes in the next couple of weeks, which now is a real possibility.
Isn't it better to keep cash savings? And drip feed it into the mortgage if necessary?
If the job is gone - we couldn't top up our mortgage again, nor could we get a loan (eg for college) until a steady income was secured, and with 6 months probation done.
It feels better and reassuring to have re-paid the mortgage but does it make any financial sense?
Click to expand...

No matter what the situation it is always best to keep a rainy day fund. Then use excess funds to pay down debt. How big that rainy day fund should be depends on personal circumstance.

If in a precarious situation keep your savings. The above advice on paying off your mortgage early assumes a steady flow of income.

Early repayment of a mortgage is a luxury, basic living is a necessity.
 
Are there any other fees associated with full early repayment of your mortgage -
I don't think there would be any legal fees, or would you need a solicitor to arrange updating the land register/registry of deeds from the bank to you, ?
The only other costs I can think of would be storing the deeds safely as the bank won't be keeping them safe anymore ?
Anyone gone through this and can advise of any costs involved ?
 
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