To Pay or not to pay Capital

S

shilling

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We have a mortgage of 315k over 35 yrs.
Fixed at 3.99 & Interest Only for 3 yrs.
Our current repayments are 1047 p/m TRS Credit of 133 p/m. Will go up to 1392 p/m if we started paying Capital & Interest.
We also save 300 a month to build up a lump sum that we will use to pay
off some of the balance of the mortage after the Fixed period expires.
We also have a lodger who pays 350 p/m rent.

The advise I want is, should we start paying capital & interest repayments and start to reduce our loan amount or should we continue to take advantage of the fact we got interest only for 3 yrs?

 
If you can afford to then why not? I presume your mortgage is with IIB Homeloans, if that's the case then you can switch between interest only and annuty at any time with the maximum interest only period being 36 months. Most people take this at the start of the term but it can be taken (or split up) at any time.

Sarah

www.rea.ie
 
Thanks Sarah. Do you mean that if we come off Interest Only we could go back on to it with no problem maybe a year down the line for example?
 
Sarah W said:
If you can afford to then why not?
Click to expand...
Agreed - as long as you don't have any other pressing need for the money or other higher cost loans that should be attended to first and would not end up reducing or clearing your mortgage only to borrow soon after at higher than mortgage rates.
 
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