I'm currently a first time buyer and have been approved for a mortgage of €100,000 (of which I only need €80,000).
The mortgage is NIB's LTV mortgage and is <50% LTV. Therefore, it has a rate of 4.5%.
Would it make sense for me to take the full €100,000 and put the surplus €20,000 into INBS's Fixed Term Share Account for a year at a rate of 5.1%.
I know I'd have to pay 20% DIRT on the interest but, as I'm a FTB, I'm entitled to TRS on all of the interest on my mortgage. Therefore, I'm really paying 3.6% on my mortgage and receiving 4.08% from INBS - a difference of €96 for the year.
Obviously, if ECB rates rose 0.25%, this €96 would be reduced to €56 and if they rose 0.5%, the €96 would reduce to €16. However, ECB rates are just as likely to drop which would increase the savings.
The mortgage is NIB's LTV mortgage and is <50% LTV. Therefore, it has a rate of 4.5%.
Would it make sense for me to take the full €100,000 and put the surplus €20,000 into INBS's Fixed Term Share Account for a year at a rate of 5.1%.
I know I'd have to pay 20% DIRT on the interest but, as I'm a FTB, I'm entitled to TRS on all of the interest on my mortgage. Therefore, I'm really paying 3.6% on my mortgage and receiving 4.08% from INBS - a difference of €96 for the year.
Obviously, if ECB rates rose 0.25%, this €96 would be reduced to €56 and if they rose 0.5%, the €96 would reduce to €16. However, ECB rates are just as likely to drop which would increase the savings.