Trade Up? Stay put?

B

BONJOURNO

Registered User
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Hi all would appreciate your advice because I'm finding my self in a bit of a dilemma

I'm 39 , single, and living in a two bed duplex in a part of dublin that i like. It is my first home which im paying a mortgage on, but my salary has basically more than doubled since i first bought it,

Obviously this recent sigtnificant pay rise means my current mortgage is a much smaller proportion of my income these days.

As such, I feel like I have an opportunity to trade up to a more valuable property proportionate to my income; I dont have any real need to do this, but it would be nice to live closer to work (i live on southside work on northside), but realistically there is no real necessity to move.

I suppose my question is this- with an increase in pay, would it be silly of meto pass up the opportunity to trade up now, before property prices rise quicker than my salary does?

Thanks
 
I think it depends on other factors. I wouldn’t move just because your earnings have increased. If your current place is nice, consider staying put. If a nicer better located property would improve your life, consider it.
 
Unless you are a civil servant and will remain there until retirement then I'd shelve that as an excuse.
Friend did that only to be settled in new home for a year only to be made redundant out of the blue. A simple sign off in a board room in California and do not pass go etc.
 
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If OP is considering moving, even in a few years time, the reduced mortgage outstanding will give them a much greater choice.
 
DannyBoyD said:
If OP is considering moving, even in a few years time, the reduced mortgage outstanding will give them a much greater choice.
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You are making a pile of assumptions to arrive at that conclusion.

Bottom line - maximising tax-relieved pension contributions trumps paying down a mortgage ahead of schedule in virtually all circumstances from a financial perspective.
 
Sarenco said:
We haven’t been given anything like the full financial picture
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Agreed - OP has given us one aspect on which they had a question
Sarenco said:
so you’re just making wild assumptions.
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Assumptions, yes that is true. We have to make certain assumptions to formulate a reply.

It is not however "wild" to consider a 30-something FTB purchased their first home with a significant mortgage.

What is "wild" is that not only do you view your assumption (FTB with huge deposit / small mortgage) as more likely. But you fail to see that in your advice (pension contributions) you are also making assumptions.

So since the OPs question is concerning their home & not their pension; I believe using their excess income to pay down the mortgage would be a sensible move at this time.

In any event, I'm sure the OP can make up their own mind.
 
Are there any suitable jobs on the southside where you currently live ?
Moving your job rather than your home might be worth considering.
 

OP you seem to like where you live. Can you see yourself there long term ie does the duplex aspect make you fearful for a time when you are older and you have access issues (a long way off!) or would you prefer more space, more privacy, a garden etc? Can any of those issues be otherwise solved without moving ie declutter possessions, rent a storage unit, rent an allotment. Or would you hope to make a large profit from your PPR when older to facilitate early or more comfortable retirement etc.

What is it apart from your ability to buy a different home financially is prompting this? It seems like it is almost the default that we house ourselves to the max or to mirror what we see our peers doing. But it does not always equate to additional happiness. In your case it might, so really assess how a new home might make you happier. Or do a dive into other things that might, eg unpaid leave, luxury travel, a really nice car etc to enjoy the fruits of your labour.
 
As a general rule of thumb (is there any other kind?), it’s better to make 40% tax relieved pension contributions than to overpay one’s mortgage.
 
Gordon Gekko said:
As a general rule of thumb (is there any other kind?), it’s better to make 40% tax relieved pension contributions than to overpay one’s mortgage.
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For what it's worth...

Key Post - Overpay mortgage or contribute to pension or do something else?

This comes up in a lot of different threads, so I will set out some principles here to kick off the discussion. I will edit it in the light of feedback. There are many options with your savings in excess of your emergency cash fund Pay down your mortgage Build up a fund to enable you to trade...
www.askaboutmoney.com
But, I agree with others who suggest that this question probably needs a Money Makeover in order to get better feedback.

Key Post - Basic information required for the "Money Makeover" forum

It can be difficult, but please try to use a meaningful title in your thread For example "27 year old with mortgage arrears". You will get a much better and much more coherent answer if you give as much information as possible in your first post. For example, if you give your mortgage rate, it...
www.askaboutmoney.com
 
Yes, depends on personal circumstances. I reduced my pension payments in order to pay down a mortgage in recent years. As a result, I can now get a higher mortgage to enable me move to a house in an area I prefer. This area will suit me better when I'm a pensioner with a small pension than the present area would with a big pension.
 
I did the same thing but based it around overpaying my mortgage until my deposit amount on the new gaff got me to the 50% LTV and the lowest rate that came with it
 
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