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Paying extra off Tracker

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  • 21-12-2011 12:43pm
    #1
    Mrs B
    Registered Users Posts: 33 ✭


    I do apoligise if this topic was already covered on the board, cant seem to find it..

    I am currently on a tracker, and was considering paying extra off my mortgage each month, we pay just over 1% at the moment, and i will be getting extra trs from Jan for being First time buyer, so it is worth it to pay extra off our mortgage or just save it up for a rainy day.
    our mortgage is over 35 years, we are only in year 5.. so have a huge amount to pay, and i dont know if an extra €200/€250 a month is going to put much of a dent into the amount owed? the other thing is we might only be able to pay this extra for the next 5 year or so until the TRS finishes in 2017..

    Any advice? cant seem to find any websites with calculators so i can work out how much we would be saving etc..


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    #2
    Pablo Sanchez
    Closed Accounts Posts: 1,207 ✭✭✭Pablo Sanchez


    Hi Mrs B, seeing as your on such a small interest rate, it may be better to put the extra money into a savings account, some are offering 4% interest, and then god forbid should rates go up massivly then you can take the money from your savings and take it off your mortgage balance.


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    #3
    Mrs B
    Registered Users Posts: 33 ✭Mrs B


    Pablo Sanchez wrote: »
    Hi Mrs B, seeing as your on such a small interest rate, it may be better to put the extra money into a savings account, some are offering 4% interest, and then god forbid should rates go up massivly then you can take the money from your savings and take it off your mortgage balance.

    Thanks Pablo...
    Thats the other option that I was thinking of..
    I just cant see and extra €2k a year making such a big impact on what we owe !!


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    #4
    pwurple
    Closed Accounts Posts: 12,449 ✭✭✭✭pwurple


    I agree... 1% over ECB is v low, you will do better by putting your extra cash into high interest savings accounts, saving a lump sum, get the interest on that, and then put that into the mortgage.

    V simplified (ignoring DIRT, TRS, and compound interest)

    250 a month will be 3000 a year in savings. At 3.5% savings that is 105 euro in interest.

    If you had put that 3000 into the mortgage instead (@2.25%), you would have reduced your interest payments by 67 euro a year.

    Not much in it but the savings is the slightly better plan.

    Bit more overhead involved in setting up the savings account if you don't have one.


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    #5
    Mrs B
    Registered Users Posts: 33 ✭Mrs B


    Thanks for that pwurple..
    We do have a savings, must check how much interest we are getting..
    I think we could be better off going down that road, then just paying the extra monthly...


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