Pay off Mortgage with shares? advice needed

C

Cabo2000

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Personal details

Age: 46
Spouse's age: NA
Number and age of children: 0

Income and expenditure
Annual gross income from employment or profession: ~€230,000 (Salary, Car, Bonus)

Monthly take-home pay: €8340

Type of employment - Employed.
Employer type: private company.

In general, are you:
(b) saving - €2000 a month

Summary of Assets and Liabilities
Family home value: €800,000
Mortgage on family home: €212,000 (+€50000 prepaid)
Net equity: €638,000

Cash: €50,000
Defined Contribution pension fund: €350,000
Company shares : €120,000 (2 companies) ~€100,000 fully vested by March 2025
Buy to Let Property value: N/A
Buy to let Mortgage: N/A

Total net assets: €1.1m

Family home mortgage information
Lender: PTSB
Interest rate 2.8%
Type of interest rate: tracker, variable, fixed: Fixed
If fixed, what is the term remaining of the fixed rate? 3.5 Yrs

Remaining term: (Original term is not relevant): 205 months
Monthly repayment: €1300 (+€1500 overpayment)

Other borrowings – car loans/personal loans etc

PCP car - €450 p/m

Do you pay off your full credit card balance each month? Yes

Pension information

Value of pension fund: 1st fund €300000

Current fund €50,000 (7% & 10.5% employer) – maxing with AVC to €28k limit.

Other savings and investments:
PTSB monthly saver: Savings (2.5%) €23500

Overflow savings PTSB (0.1%) €4000

Raisin Demand Deposit 3.1% - €15000

Credit Union - €5500

Prize Bonds € 2800

Other information which might be relevant

Life insurance: Mortgage Insurance and Death in Benefit.

What specific question do you have or what issues are of concern to you?

With €50,000 cash in savings, I am now considering diverting my monthly saving amount of €2k to mortgage from this month, giving a monthly overpayment of €3500 – is this the right thing to do?

The last of my shares with my previous company will mature in March of 2025 – I am considering selling these to pay into the mortgage in March – with the overpayment I could be finished mortgage in late 2025? Is this the right thing to do or should I continue to build cash and invest this?
 
Is there something wrong with my post? It appears I am the only person in a long time to get 0 response? Would be keen to get an understanding why?
 
There's a big psychological benefit to being debt free. I'd clear the mortgage.
 
Hi Cabo

Nothing at all wrong with you post. People probably looked at it and thought "nothing to contribute here"

It's easier to correct people than say Well done!

Cabo2000 said:
PCP car - €450 p/m
Click to expand...

This was the only small issue I would query. Are you paying interest? If so why? And when it matures, do you have to have a lump of cash to buy out the car? If so, make sure you have that cash.

Otherwise, pay down the mortgage using ptsb's excellent credit facility.

Brendan
 
Do you have any bucket list trips or purchases to make? Maybe divert some of your shares to that as well? You have ample income to service the mortgage so can possibly treat yourself to something?
 
I think you have a solid plan to pay off the mortgage.

My only small query is why do you have a PCP loan on your car? And you say your income includes a car so is this a second car? With your monthly income you should have easily been able to save for a car and pay cash. But maybe your move to this €230K role is recent.

And given your income, your potential 20 more years of work it would be good to engage an independent financial advisor to help you project future investment, long term goals in finances to make the the most cost effective and strategic plan for your life-style into the future. Well done on achieving a great income to date.
 
At your current trajectory, I reckon you could debt free by the year you turn 50.

At that stage, you can up your pension contributions to €34.5k pa.

I think you should maintain an equity heavy (maybe even 100%) allocation in your pension.

Once the car loan and mortgage are cleared, you can start building a cash fund with your after-tax savings.
 
Brendan Burgess said:
Hi Cabo

Nothing at all wrong with you post. People probably looked at it and thought "nothing to contribute here"

It's easier to correct people than say Well done!



This was the only small issue I would query. Are you paying interest? If so why? And when it matures, do you have to have a lump of cash to buy out the car? If so, make sure you have that cash.

Otherwise, pay down the mortgage using ptsb's excellent credit facility.

Brendan
Click to expand...
Thanks Brendan - I am pretty confident I am in a good place - just needed some reassurance that I was not making glaring mistakes.

As for the PCP on the car - it was really for convenience at the time I did not have cash reserves to buy the car outright so would have taken a loan - knowing that the car is just depreciating all the time, i view the PCP as a bit like rental - I get a new car every 3 years, they manage the servicing etc.

I should be in a position to use cash to buy out this car - or a new one when this PCP term is up.
 
You should put part of your savings/rainy day fund into your mortgage pre-payment facility - in the event of a rainy day, you can use it to make formal repayments but in the meantime it will return you 2.8% DIRT-free as an offset against your mortgage balance. Only your Raisin Demand Deposit is beating that rate of return, although not after DIRT is taken off it.

Downside is it will be locked up until the mortgage is cleared, but that won't be long coming around, well done!
 
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