Big mortgage or spend the money

jackass111

Currently looking to buy a property €500,000.

Have approx €400,000 savings.

Changing jobs after purchase so earnings will decrease significantly.

Was going to take mortgage of €280,000 and the rest from savings.

Will need agri loan in the future.

Should I up the mortgage and invest the savings or keep it smaller as will need the agri loan in the future.

mickdw

Alot would depend on your age, you future earning prospects and your own attitude to borrowing.

I'd be inclined to get approval for as much mortgage as possible as a start point.

CianRyan

Remember you'll pay less interest on a lower loan to value mortgage, I saved nearly 2% because a significant lumpsum, not quote 80% mind you!

Jim2007

| Was going to take mortgage of €280,000 and the rest from savings.

This would be the most likely approach to achieve your long term objectives. No one knows what exactly will happen in the coming years but all of the following have been regular in the past and there is no reason to think they will not happen in the future:

• A recession
• Inflation
• Job losses
• High interest rates
• Credit squeeze

Being highly leveraged in a recession makes you extremely vulnerable to financial ruin. People are still trying to recover from the last recession and some probably never will. And while it is popular to blame the banks, the government, the economy or just bad luck, the reality is that if you make a dumb financial decision you will be the one paying for it.

It's one of the biggest decisions you'll ever make in your life. Don't take the opinion of people on boards and get a financial advisor..... You'd want some sort of pension as well. Without knowing your full financial status it's impossible for anyone on boards to advise

iColdFusion

You need to do the maths on how much interest you are prepared to pay over what time for the security of having extra cash in your bank account and how long it will take you to be debt free, CCPC have some good calculators and comparisons on their website so you can see what maximising LTV and reducing payment period can save you in interest payments over time:

https://www.ccpc.ie/consumers/money-tools/mortgage-comparisons/

If it were me id want to be pretty sure that property is worth the 500k you are prepared to pay for a start, property market is madness at the moment and if you have that much cash in the bank the auction sites such as BidX1 might offer more value, those auctions are really only for cash buyers so you're not competing with mortgage buyers, it is a bit mad to be going for a mortgage with that much money in the bank but I hate debt!

mickdw

Ya the bidx1 stuff will have some problem or other with title or structure, planning or access etc so generally not for mortgage buyers. I did deal with a bidx1 property last year where bank gave a mortgage to the sitting tenant to buy even though the planning situation was a shambles. Buyer gave an undertaking to apply to rectify planning situation within 3 months but was very unusual.

Can be bargains got for sure.