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Paying extra on a variable rate mortgage

  • 27-11-2008 3:06pm
    #1
    NEDDURC
    Registered Users, Registered Users 2 Posts: 452 ✭✭


    I have a variable rate mortgage and as the interest rates are going down I am wondering would it be worth my while to pay abit extra each month say 50 or 100E over what I am due to pay?
    Supposing I pay 100 extra then I am really saving approx 200 as that is what I would have to repay with when interest is included over time!
    Has anyone experience of this? Are there any penalties or downside on this?


Comments

  • #2
    kaiser sauze
    Registered Users, Registered Users 2 Posts: 1,558 ✭✭✭kaiser sauze


    Generally, no; there is no penalty for paying of extra on a variable.

    You need to talk to your lender to make sure about this though.


  • #3
    Thomas_S_Hunterson
    Closed Accounts Posts: 6,151 ✭✭✭Thomas_S_Hunterson


    Definitely pay extra whenever you can.


  • #4
    NEDDURC
    Registered Users, Registered Users 2 Posts: 452 ✭✭NEDDURC


    I've never heard any expert on the radio suggest that you should pay your mortgage off abit quicker if possible (extra few quid a month) but they do highlight the benefit of paying into a pension as you get/used to get higher rate relief on it.
    Am I right to say that paying extra off your mortgage is a better use of your money as you are getting more than the 40% return on it as it would cost you alot more if you stuck to your repayment schedule?


  • #5
    kaiser sauze
    Registered Users, Registered Users 2 Posts: 1,558 ✭✭✭kaiser sauze


    NEDDURC wrote: »
    I've never heard any expert on the radio suggest that you should pay your mortgage off abit quicker if possible (extra few quid a month) but they do highlight the benefit of paying into a pension as you get/used to get higher rate relief on it.
    Am I right to say that paying extra off your mortgage is a better use of your money as you are getting more than the 40% return on it as it would cost you alot more if you stuck to your repayment schedule?

    This depends on the amount of mortgage outstanding and on what stage of pension provision you are at.

    I have often heard commentators advising to pay of your mortgage early.


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