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Should I pay my mortgage off?

  • 27-03-2012 4:39pm
    #1
    whymewhy1982
    Registered Users, Registered Users 2 Posts: 5 ✭


    Simple Q from a simple person, with no financial know-how.

    I have a €110,000 mortgage. 8 years left on the mortgage. I see from my bank statement that I have around €56,000 left to pay.

    The question I have is: I just about have enough money in my credit union to pay it off. Should I or would I be better keep paying it monthly?


Comments

  • #2
    NIMAN
    Registered Users, Registered Users 2 Posts: 34,685 ✭✭✭✭NIMAN


    I'd pay it off or at least a good portion of it if you want to keep some savings.

    I think the technical answer you will get from more knowledgeable people than me is that if you could invest your savings at a higher rate than what you're paying on your mortgage interest, then its better to save as you are making more.

    But I would love the idea of being mortgage free.


  • #3
    GSF
    Registered Users, Registered Users 2 Posts: 1,831 ✭✭✭GSF


    whymewhy1982 wrote: »
    Simple Q from a simple person, with no financial know-how.

    I have a €110,000 mortgage. 8 years left on the mortgage. I see from my bank statement that I have around €56,000 left to pay.

    The question I have is: I just about have enough money in my credit union to pay it off. Should I or would I be better keep paying it monthly?
    Depends what interest rate you are paying on your mortgage versus the interest rate you get on your savings? What % rates are you paying/ getting?

    If you are earning more or the same in the savings account as the mortgage interest rate, you are better holding on to the money in a savings account (say Nationwide UK, Ireland or PTSB at 3% before DIRT). At least then you can access the cash if you need it for emergencies (if you are made redundant or whatever)


  • #4
    Liam D Ferguson
    Registered Users, Registered Users 2 Posts: 542 ✭✭✭Liam D Ferguson


    You're presumably paying >€600 per month on mortgage repayments at the moment, which includes capital repayments. If you do decide to pay the whole thing off using your savings, don't just get used to having this €600 extra per month. Start a regular savings account for €600 per month.

    The other thing to consider is access. As the other replies have said above, compare interest rates. But remember also that if you use all your savings to pay off your mortgage, it's can be difficult and expensive to get them back again if you need them in a hurry - you'd have to apply for a new mortgage and you might not get it. So it's probably best to leave yourself some small level of emergency cash.


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