Save Money or increase Mortgage Payments?

veryangryman · 09-01-2008 4:27pm #1

Hi,

I have a Mortgage and am also saving €300 pm in AIBs RegSave Account.

Now that their rate is gone crap again, should i invest the money in the Mortgage, or should i reinvest in some other savings crowd?

Let me know what ye think from your own experiences if applicable?

Thanks!

veryangryman · 09-01-2008 4:32pm

Any opinions?

BuffyBot · 09-01-2008 4:52pm

You gave it a whole 5 minutes. Give people a chance to reply before bumping a thread.

calsatron · 09-01-2008 5:23pm

The interest you pay on your mortgage will always exceed the interest the bank pays on its regular savings accounts, they would lose money otherwise.

The things to consider are the ease with which your mortgage will allow you to increase payments, some older style mortgages may have punitive clauses if you attempt to repay early while newer "current account" style mortgages encourage a more flexible payment approach.

Depending on the value you have in your savings you could also look at moving your savings to a better performing account/investment. Generally the higher paying the account the less ready access you will have to your money.

paulksnn · 09-01-2008 5:30pm

Even the term deposit savings accounts aren't going to match the interest rate being charged on a mortgage.
As Calsatron said, an investment account should be able to beat mortgage rates over 3-5 years.

Personally I preferred to take lumps off my mortgage, and get done with it earlier.

Colonel Sanders · 09-01-2008 10:09pm

First active regular saver pays 7.15% (5.72% net of tax). I'd be amazed if your mortgage rate was this high.

daveirl · 10-01-2008 9:42am

This post has been deleted.

veryangryman · 10-01-2008 9:45am

Its a variable Mortgage. True Sanders, it aint that high, but id sooner chuck the money into the Mortgage. Right now i have it down at a 25-year. If i threw in the extra 300 a month, i think id have it down to 17. The bank have already let me increase payments previously and id like to get it paid before im covered in wrinkles (wouldnt we all!)

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Hitchhiker's Guide to... · 10-01-2008 10:22am

pay it off your mortgage, definitely, provided that you don't need the money. If you do need the savings at some point in the future then you might find yourself having to take out a loan.

but, from a long-term financial perspective it is a no-brainer to pay off the mortgage.

Save Money or increase Mortgage Payments?

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