Pay off mortgage or keep in savings

T

tosullivan

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in a bit of a dilemna at moment...myself & the missus have a tracker mortgage on a holiday home at 0.75% above ECB. Currently we are on interest only and its costing us about €200 approx a month. Nothing huge so happy enough. Balance on the mortgage is about €138k.

When we decided to take out the mortgage we said we stay at interest only and whatever we had at the end of the year in savings made in that year we would put some of that against the principal. Been doing that for the first 2yrs but last 2yrs we hadn't.

So 12 months ago, I suggested we start doing it again and put say about 30% of what we save in the following 12mths off it.

So its that time of year and she's saying she'd rather not and keep the cash in savings. We're talking about 4k here to put off it.

In savings its only getting Rabo's 2% less dirt, so its almost like for like what the savings will make over what the payment off the mortgage will save.

Anybody give any advice what they would suggest? I'm just worried that we'll never pay off the capital where she's really not bothered
 
If you're only getting 2pc minus DIRT in Rabo it doesn't make any sense. If you move it to a higher interest savings account (most banks are offering good deals at the moment) you will earn more money than you are paying in interest on your mortgage. That way you can save it to pay off a lump sum or to cushion the blow when you come off interest only. At the rate you're going you'll never pay off the capital
 
aaa1 said:
If you're only getting 2pc minus DIRT in Rabo it doesn't make any sense. If you move it to a higher interest savings account (most banks are offering good deals at the moment) you will earn more money than you are paying in interest on your mortgage. That way you can save it to pay off a lump sum or to cushion the blow when you come off interest only. At the rate you're going you'll never pay off the capital
Click to expand...

What bank deals do you recommend?

The mortgage was taken out over 25yr and the first 5 were Interest only which is due to end in July.

Do you think the bank will allow me to continue interest only? If they do will they say I am changing my terms and use that to push me off the tracker?
 
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