What (if anything) Should I Change about our financial situation?

Mortgage protection, 650k life policy (38 years left) and 4x salary life policy via work. 400k or so mortgage protection. My partner works in public sector so whatever they get.

Prob over insured, I'll prob stop letting my life policy increase.
I still think you are overinsured.

At your age there is something like a 15x greater risk of suffering a life-limiting disability than dropping dead.

I would look at income protection insurance to some extent instead. Read the fine print as I know the criteria for payout can be strict. I thought I was invincible at your age and trust me from experience that you don't value your health until you lose it.
 
I still think you are overinsured.

At your age there is something like a 15x greater risk of suffering a life-limiting disability than dropping dead.

I would look at income protection insurance to some extent instead. Read the fine print as I know the criteria for payout can be strict. I thought I was invincible at your age and trust me from experience that you don't value your health until you lose it.

Unfortunately I can't get income protection for reasons I don't want to go into here. It's not from a lack of trying. I was lucky to get life and mortgage protection with no exclusions.
 
I've laid it out that it would be very close to cost neutral. Question is, is it worth it.
Well in that case it's a no brainer.if you believe interest rates are going up you are basically getting a free hedge against it.

If they don't it's unlikely they will go lower than what you can fix with avant with so you are only down a few k anyway.
 
Took the advice of here and swapped to Avant for 7 years at 1.95% a week they increased rates.

We are in the position to pay off a lump sum if we choose to before the end of year, approx 30k as Avant allow you to pay 10% off the capital per year. My question is, is it still a good idea to overpay lump sums? I know the wisdom here has been traditionally overpay mortgage and max pension; we've already maxed both our pensions for last year and will continue to do so. Is overpaying a mortgage at 1.95% still the best thing to do, or have things changed enough to do something else?
 
My question is, is it still a good idea to overpay lump sums? I know the wisdom here has been traditionally overpay mortgage and max pension; we've already maxed both our pensions for last year and will continue to do so. Is overpaying a mortgage at 1.95% still the best thing to do, or have things changed enough to do something else?
 
Hi fungie

Yes, you should pay it off.

If you can find a safe bank which pays a deposit rate of about 3.5%, on a notice term less than the term left on your fixed rate, then you could consider putting it on deposit instead.

Brendan
 
Hi fungie

Yes, you should pay it off.

If you can find a safe bank which pays a deposit rate of about 3.5%, on a notice term less than the term left on your fixed rate, then you could consider putting it on deposit instead.

Brendan
Why 3.5%? They say that their mortgage rate is 1.95%.
 
I was wondering if it might nearly be worth you starting investing so I did the maths.

A €30k mortgage overpayment will save you about €4k over the next 7 years (the length of your fixed term)

If instead you invested the €30k in an index fund that got you a return of 5% (not an unreasonable return to expect from a diverse fund) you'd make a gross profit 12k. The taxman would then take their 41%, leaving you with €7k

It's up to you whether the increased risk is worth the extra profit. You of course also do a hybrid approach as well.

If you continue your saving rate and overpaying your mortgage, you'll have your mortgage paid off over the next couple of years. You are eventually going to have to figure out somewhere else to put your money.
 
The 3.5% is subject to DIRT and USC or PRSI - I can never remember which.

Brendan
Then the other post that I linked to is confusing because there you ignore taxes/deductions for simplicity which would lead some to conclude that they should maybe put the money on deposit if the headline/gross deposit interest rate is greater than the mortgage interest rate.
 
In the other post, I made an assumption initially to clarify the principles involved.

By the end of the post, I had got rid of that assumption

If the term of the deposit is less than the remaining fixed rate period
and
If the deposit rate after taxes is higher than mortgage rate
and
if the amount on deposit is covered by the Deposit guarantee scheme

Then, leaving the money on deposit is better than paying down the mortgage.
 
Getting to that time of year to decide what to do with savings. In previous years we've knocked chunks off the mortgage but now with higher deposit interest rates, the decision isn't so straight forward.

At the moment we have approx 70k on deposit earning 4% interest. Our mortgage is approx 290-295k @ 1.95% fixed until summer 2028. The after dirt interest on deposit is 2.67%, which is a decent amount higher than mortgage interest. I'm looking for opinions on the options below:

1. Pay off 10% mortgage now and another 10% off in the new year (Avant allow this)
2. Keep money on deposit at 4%, this may go down or up as isn't fixed.
3. Fixed deposit for a few years, I've seen some 4.2% for 3 years via Raisin.
4. Some combination of above
5. Something I haven't mentioned above

Providing some additional context to help: both my wife and I have maxed out pensions for the last few years and will continue to do so as number 1 priority ahead of mortgage overpayment or deposit savings.
 
Getting to that time of year to decide what to do with savings. In previous years we've knocked chunks off the mortgage but now with higher deposit interest rates, the decision isn't so straight forward.

At the moment we have approx 70k on deposit earning 4% interest. Our mortgage is approx 290-295k @ 1.95% fixed until summer 2028. The after dirt interest on deposit is 2.67%, which is a decent amount higher than mortgage interest. I'm looking for opinions on the options below:

1. Pay off 10% mortgage now and another 10% off in the new year (Avant allow this)
2. Keep money on deposit at 4%, this may go down or up as isn't fixed.
3. Fixed deposit for a few years, I've seen some 4.2% for 3 years via Raisin.
4. Some combination of above
5. Something I haven't mentioned above

Providing some additional context to help: both my wife and I have maxed out pensions for the last few years and will continue to do so as number 1 priority ahead of mortgage overpayment or deposit savings.
First, to clarify you can pay more than 10%. There might be a break fee for amounts over the 10% but given how market rates have moved it's very unlikely you would have a break fee. So the 10% Avant cap is irrelevant.

Now should you overpay? The logic from last year still holds. New fixed term deposit rates are sufficiently above your mortgage rate. More so now deposit rates have increased further.

As long as you have the willpower not to spend the savings you could be better off diverting any excess funds to savings. Review the following thread -same one as last year - and if you're still happy with the 'risks' then keep saving.


As for 4% Vs 4.2% if both are covered by DGS and your balance is below 100k then you could go with the higher rate. But be sure the guarantees are in place.

No harm reviewing your pension situation the above assumes you're okay on that front.
 
In terms of break fees, I guess there's none since rates are much higher now than before.

We are disciplined so no issue in keeping money in savings. I guess savings is best for now and if rates drop can move that money back into overpayment.

Thanks
 
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