How much mortgage interest are you paying monthly on your principal private residence

Iwannahurl

It occurred to me recently that, given currently low interest rates, it might well be possible for some homeowners to spend less on mortgage interest every month than some others do on booze and fags, for example.

I did a quick search on Google and Boards and didn't find any info regarding the level of mortgage interest paid every month by the average householder. Hence this poll, to satisfy my curiosity.

The amounts suggested in the poll are just arbitrary. If the figures are unrealistic please let me know.

Eldarion

I think you missed the mark a fair bit on your brackets. You're gonna see a big pool of €500+.

The_Morrigan

Completely missed the mark.... going by the tax document for my TRS in 2013 I pay in excess of €800 each month in interest.

Paulw

The_Morrigan wrote: »

Completely missed the mark.... going by the tax document for my TRS in 2013 I pay in excess of €800 each month in interest.

My monthly interest payment is under €100 per month. I am on a tracker mortgage, so paying 1.35%, and my total monthly mortgage repayment (principle plus interest) is just under €1k.

Are you sure that you are doing the maths right?

If you pay interest of over €800 per month, and common interest rates are about 5% (could be a bit lower or higher but a rough rate), then your monthly repayment (interest plus principle) would be roughly €15,000 per month.

L1011

Paulw wrote: »

Are you sure that you are doing the maths right?

People not on trackers with large mortgages would be paying those kind of figures. I'm not on a tracker with what could be considered to be a very small mortgage and I'm paying about 300 a month in interest.

The_Morrigan

Mortgage interest for the tax year is nearly 10k...monthly repayments are €1200.

djmcr

Paulw wrote: »

Are you sure that you are doing the maths right?

€100k mortgage at 5% = €5000 per annum interest = €416 per month interest

Repayments over 20 yrs = approx €660 a month

The_Morrigan

MYOB wrote: »

People not on trackers with large mortgages would be paying those kind of figures. I'm not on a tracker with what could be considered to be a very small mortgage and I'm paying about 300 a month in interest.

Yup pretty big mortgage here and no tracker, they had stopped that product when I bought in 2008.

No Pants

Isn't the interest front loaded too?

Iwannahurl

Eldarion wrote: »

I think you missed the mark a fair bit on your brackets. You're gonna see a big pool of €500+.

The_Morrigan wrote: »

Completely missed the mark.... going by the tax document for my TRS in 2013 I pay in excess of €800 each month in interest.

Oops. I genuinely had no idea. I thought I was being excessive with six €100-wide categories.

Not sure if it's possible to change the poll, or worth the effort...

The_Morrigan

Iwannahurl wrote: »

Oops. I genuinely had no idea. I thought I was being excessive with six €100-wide categories.

Not sure if it's possible to change the poll, or worth the effort...

I should be able to edit the poll once I get to a pc. Drop me a pm if you want other options included.

Iwannahurl

Thanks. Just keep on going as high as you like! €1200? €1500?

djmcr

No Pants wrote: »

Isn't the interest front loaded too?

Interest calculated on remaining capital which reduces in value as you pay off more over time

Victor

Paulw wrote: »

My monthly interest payment is under €100 per month. I am on a tracker mortgage, so paying 1.35%, and my total monthly mortgage repayment (principle plus interest) is just under €1k.

Are you sure that you are doing the maths right?

If you pay interest of over €800 per month, and common interest rates are about 5% (could be a bit lower or higher but a rough rate), then your monthly repayment (interest plus principle) would be roughly €15,000 per month.

It really depends on what stage the mortgage is at. A repayment on a new mortgage is almost all interest. A repayment on an about-to-expire mortgage is almost all capital.

jon1981

1150 big ones on interest

The_Morrigan

OP I've edited and reset the poll - there are limited options so I had to change the monetary intervals to get up the scale to include some of the amounts mentioned in the thread.

For those that already voted, can you pm me the bracket you are in and I'll add your vote back into the new poll.

Iwannahurl

Victor wrote: »

It really depends on what stage the mortgage is at. A repayment on a new mortgage is almost all interest. A repayment on an about-to-expire mortgage is almost all capital.

The interest rate and amount borrowed must have a major bearing too, right? Presumably 'mature' Tracker mortgages must have a relatively low level of interest to be paid monthly?

Pipmae

25 year mortgage when drawn down for €260k (year 2000)

11.5 years remaining on it

Currently a tracker mortgage 0.60% above the ECB base (tracker on it since 2010 - it was fixed a few times prior to that)

Current monthly repayment of €1460

Estimated monthly interest of €600 to €640

We're kind of in a position to overpay it to the tune of €300 a month but we've decided to save the €300 instead. It will go toward cars when they need to be replaced.

OMD

Pipmae wrote: »

25 year mortgage when drawn down for €260k (year 2000)

11.5 years remaining on it

Currently a tracker mortgage 0.60% above the ECB base (tracker on it since 2010 - it was fixed a few times prior to that)

Current monthly repayment of €1460

Estimated monthly interest of €600 to €640

We're kind of in a position to overpay it to the tune of €300 a month but we've decided to save the €300 instead. It will go toward cars when they need to be replaced.

.
Your figures don't look right. Tracker 0.6% over ECB means an interest rate of 0.85% a year. Interest a year should be about €150 a month. How is your monthly repayment €1460?

murphaph

OMD wrote: »

.
Your figures don't look right. Tracker 0.6% over ECB means an interest rate of 0.85% a year. Interest a year should be about €150 a month. How is your monthly repayment €1460?

Without the current outstanding balance it's not possible to come to any conclusions. He was fixed at various rates until 2010 so the balance could be anything.

OMD

murphaph wrote: »

Without the current outstanding balance it's not possible to come to any conclusions. He was fixed at various rates until 2010 so the balance could be anything.

€600 interest a month is €7200 a year. At 0.85% interest means the outstanding balance in €850,000. He has 11 years left in the mortgage which means he should be paying €80,000 a year on his mortgage.

So I am correct in my conclusion his figures are incorrect.

Grandpa Hassan

This is all meaningless without knowing how long the mortgage is outstanding. I'm not far in, and over 80% of my mortgage payment of €1450 is interest.

The_Morrigan

Grandpa Hassan wrote: »

This is all meaningless without knowing how long the mortgage is outstanding. I'm not far in, and over 80% of my mortgage payment of €1450 is interest.

It is a meaningless figure, but on the flip side it is an eye opener to show just how high some interest payments are these days.

I remember seeing my mortgage documents in 2008 and was shocked that the interest portion was higher than my principle amount - at some point I'm going to start paying extra to cut down that interest portion. Even an extra hundred euro a month will take off 35K from the interest payments on my loan. That is a massive saving overtime.

dinnyirwin

On the family home €110 per month interest, but we bought it in 2000 and are on a tracker since trackers came into fashion. 0.5% above ECB.

Could have paid it off long ago, but the money is better invested elsewhere. It would be foolish paying off that mortgage.

If only you could get a tracker nowadays.

murphaph

Trackers still available in Germany and presumably other places. The issue is not the tracking nature but what it tracks and at what margin. German trackers follow the EURIBOR, for example.

snakeoilsales

Shylock needs another house...

Hmmmm....

Iwannahurl

Grandpa Hassan wrote: »

This is all meaningless without knowing how long the mortgage is outstanding. I'm not far in, and over 80% of my mortgage payment of €1450 is interest.

Point taken. To compare like with like, at minimum you'd need to know what stage people are at with their mortgage.

A Boards poll isn't able to capture that level of detail, I suppose.

We got our mortgage in 2002, so the interest portion is on the low side at this stage. It was looking at the annual statement for 2013 that made me wonder what level of interest others might be paying.

dinnyirwin wrote: »

On the family home €110 per month interest, but we bought it in 2000 and are on a tracker since trackers came into fashion. 0.5% above ECB.

Could have paid it off long ago, but the money is better invested elsewhere. It would be foolish paying off that mortgage.

If only you could get a tracker nowadays.

That caught my attention. Is there no value/purpose at all in trying to pay off a Tracker early? I'm sure it's good for the banks, but is it not worthwhile to some extent for the homeowner to take more off the principal while the base interest rate remains low?


.

murphaph

Iwannahurl wrote: »

That caught my attention. Is there no value/purpose at all in trying to pay off a Tracker early? I'm sure it's good for the banks, but is it not worthwhile to some extent for the homeowner to take more off the principal while the base interest rate remains low?

In Ireland it is easy to beat the interest charged on a low margin tracker simply on a deposit. If the ECB rates rise and the tracker interest rate increases above the deposit rate, you just pay off a lump sum with the savings and then switch to paying the mortgage off rather than saving.

The only risk is that your savings are raided as part of some bail in of the banks. That alone might make some people prefer to pay the mortgage down. Personal choice at the end of the day but I wouldn't pay off such a low margin tracker either.

dinnyirwin

Iwannahurl wrote: »

That caught my attention. Is there no value/purpose at all in trying to pay off a Tracker early? I'm sure it's good for the banks, but is it not worthwhile to some extent for the homeowner to take more off the principal while the base interest rate remains low?
.

For example if I owe 100k on the mortgage (0.5% ECB tracker) and and pay off the mortgage im saving myself less than €2k a year for using up my 100k to pay that mortgage off. But lets take €2k as a round number.

So last Jan I bought 100k ETFs and made another €30k approx.

Now that was a good year in the markets but its not hard to beat €2k a year with an investment of 100K.

Alternatively you buy an apartment in Dublin with it and rent it and you still beat €2k even after taxes.

Or split it into 3 deposits and get mortgages at current rates and rent out 3 dublin apartments.

There are thousands of ways to beat that return.

There is always risk though, but if you have sums that are high enough the risk can be mitigated easily enough.

MouseTail

Iwannahurl wrote: »

That caught my attention. Is there no value/purpose at all in trying to pay off a Tracker early? I'm sure it's good for the banks, but is it not worthwhile to some extent for the homeowner to take more off the principal while the base interest rate remains low?
.

the only situation it makes sense to overpay a (low) tracker is if the holders are not savers/investors, and would just spend the extra money on stuff. Even State savings beat paying down a low tracker.

yankinlk

Cheapest money you will ever borrow is your mortgage. This poll is pointless btw. Except the thread itself is usefull for some to learn about the int versus capital. Scary this that they may have signed up to 30 year mortgages and not known that...