Shared loan - one wants to pay off their share early

G

garbanzo

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Long time browser first time poster, great site Brendan. Looking for a steer on an issue.

My three siblings and I are 13 years into a 20 year mortgage on a holiday home. The four of us all pay €210 per month into a current account which covers off all the costs of the house. I tend to oversee the accounts, ensuring all is as it should be, paying bills and the like. Has worked out really well, no rows, great place, near the sea, kids love it etc. etc.

Currently about €60,000 is outstanding on the mortgage at a rate of 4.5%. Mortgage is with AIB and is €625 per month. One of my siblings has come into a lump sum and wishes to pay off his share of the outstanding loan. That's fair enough, but I am wondering how you would calculate how much he needs to pay in a lump sum.

- Would it be a straight lump of €15k (i.e. €60k divided by 4)?
- What would this do to the €625 pm repayments for the rest of us?
- I know he will need to continue paying his portion of the non-mortgage costs so it is just the treatment of his mortgage portion I am looking for a steer on.

I just want to ensure whatever we do is fair to all and I can't get my head around the mathematics here.

All advice appreciated.
 
If you owe €60k between you, her share is €15k so she pays that off.

If you tell the lender that you want to keep the same term i.e. 7 years left, the total repayments should be reduced by 25%, so your individual repayments would remain the same.

Brendan
 
Thanks Brendan. I was concerned it would not be such a simple solution but glad to have your view. Will communicate with the lender as suggested.

Cheers.
 
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