View Poll Results: Do you overpay your mortgage?
Yes! Pay everything I can off it 96 24.37%
I overpay a small bit. 102 25.89%
No. I'd rather the money in my pocket. 117 29.70%
Don't have a mortgage. 79 20.05%
Voters: 394. You may not vote on this poll

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30-04-2021, 14:57   #61
murpho999
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Originally Posted by Niner leprauchan View Post
On a tracker with a company that won't accept overpayments. I can write a cheque and send it in annually but can never seem to manage it with kids, bills, etc.
Find an investment fund that returns more than the mortgage interest rate on your mortgage and then you're making money and then you can pay off your mortgage with the profits.

Really think people are foolish just overpaying their mortgage.
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30-04-2021, 15:17   #62
JimmyVik
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Was talking to my brother about this as he is moving.
He had a tracker at 0.7% and he said he overpaid for the first year by 50%.
Then he was wondering why he bothered and stopped the overpayments and bought funds and equities.
His house is paid off now anyway, but the money he diverted from over payments to equities and funds are allowing him to retire early now too.
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30-04-2021, 15:32   #63
chosen1
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I don't pay anything more than my repayment rate and don't plan to.

The way I look at it is that as long as there is upwards inflation, the money I have now is more valuable to me than the money that will be left to pay off in 25 years time. The €1000 a month I pay now is a significant percentage of my salary, but I'd confidently expect that the repayments in my final years of the mortgage will be a greatly reduced portion of my salary at that time.

People I know of my parents generation, finished up their mortgage with repayments of just over €100 a month and I'd bet that money was a lot more costly to them back in the early 80s. Granted there was greater inflation then than now, but I'd still expect the cost to reduce somewhat.

Also I'm at the stage in life where there are plenty of other outgoings to take care of in the form of childcare and education. Want to be able live a comfortable lifestyle and take plenty of leisure time and holidays, without pouring it all in to one asset.
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30-04-2021, 15:38   #64
Blackjack
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Originally Posted by jimmytwotimes 2013 View Post
Does you does or does you don't take Access?
showing your age there.
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30-04-2021, 15:56   #65
blue note
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Originally Posted by Paul_Mc1988 View Post
Another point I find frustrating is that people say a mortgage is the cheapest money you can get.

The money you save is the cheapest money you can get. Bar a mortgage which is a necessary evil, taking a loan for anything else (holiday/car) is a mugs game. Buy the things you can afford and in the end you'll be much better off financially.
But the thing is - if you don't pay extra off your mortgage you're more likely to have money left over for things like a holiday / car / home improvements. So if you pay an extra €1,000 off your mortgage you'll save say €300 per year. But if you need a new car and need to borrow €1,000 less for it you'll save €600 a year.

That's what people mean when they say a mortgage is cheap money. It's all well and good saying that a loan other than a mortgage is a mugs game, but sometimes you'll need money for something. Home repairs, medical / funeral expenses, college, etc. No-one is defending someone going to a money lender for a lavish holy communion, but plenty of loans are taken out by people who have considered the cost of them, are able to comfortably repay it and just consider the cost of the loan to be worth it. Even if it's for a holiday or the like.
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30-04-2021, 16:01   #66
smokie72
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With Kbc and overpaying by €160 per month. Have savings as well and plan to pay a lump sum in several years time and clear the mortgage 10 years early. The house is only an asset when the mortgage is paid off. I plan then to put any savings towards my pension and downsize by selling the house and move out of Dublin.
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30-04-2021, 16:13   #67
bilbot79
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Originally Posted by A Tyrant Named Miltiades! View Post
No I certainly do not overpay my mortgage and whenever this question comes up, I find myself getting very mad at Eddie Hobbs, who used to go around telling everyone to overpay their mortgage.

If you are already very rich, then overpay your mortgage. Most of us are not at all rich.

Like most mortgage owners, I don't have a big rainy day fund sitting in a bank account, so comparing savings vs lending interest rates is purely theoretical in the first place.

If I put all my money into my mortgage, however, i will inevitably need a personal loan sometime in the future, or run up a big credit card debt. Have you seen the rates they charge?

Keep your money. Pay at the agreed rate. If you are likely to need a personal loan in the medium -future, do not pay down your mortgage. Save that money for a rainy day.
I see what you're saying but would also draw your attention to the fact that a rate of 2% on 100k is the same amount of repayment as a rate of 10% on 20k

People always bang on about how 'its the cheapest money you'll ever have' but the reality is that the amount owed dictates a lot. I've just increased my mortgage to 345k with minimum repayments around 1500. I'll spend the first 2-3 years trying to pay down 4k a month. Tough but big debts need to be reigned in and i would say rates will start going up in about 3 years.

If the interest portion of my loan is 560 at 1.95% now but if the rate increased to 3% it would be 840. Thats because the principal is so high. If you have big debt then pay down hard and fast, potentially easing off later.
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30-04-2021, 16:17   #68
bilbot79
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Originally Posted by smokie72 View Post
With Kbc and overpaying by €160 per month. Have savings as well and plan to pay a lump sum in several years time and clear the mortgage 10 years early. The house is only an asset when the mortgage is paid off. I plan then to put any savings towards my pension and downsize by selling the house and move out of Dublin.
I reckon you have more to gain putting your money into the pension than the mortgage. Max out the pension contributions, then overpay the mortgage.
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30-04-2021, 16:19   #69
griffdaddy
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Originally Posted by A Tyrant Named Miltiades! View Post
No I certainly do not overpay my mortgage and whenever this question comes up, I find myself getting very mad at Eddie Hobbs, who used to go around telling everyone to overpay their mortgage.

If you are already very rich, then overpay your mortgage. Most of us are not at all rich.

Like most mortgage owners, I don't have a big rainy day fund sitting in a bank account, so comparing savings vs lending interest rates is purely theoretical in the first place.

If I put all my money into my mortgage, however, i will inevitably need a personal loan sometime in the future, or run up a big credit card debt. Have you seen the rates they charge?

Keep your money. Pay at the agreed rate. If you are likely to need a personal loan in the medium -future, do not pay down your mortgage. Save that money for a rainy day.
It's possible people's personal circumstances could change over a period of 35 years and they may be able to afford to overpay now when they couldn't previously?
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30-04-2021, 16:28   #70
jj880
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Originally Posted by Paul_Mc1988 View Post
You find something hard to believe even though a simple Google search tells you it's true. Used the Internet before?

Ulster Bank allow a 10% of your outstanding balance per year..... have 300k left on your mortgage and you can over pay by 30k

KBC allow the same

BOI fine you a very small amount
Forgive me for thinking the banks (especially in Ireland) would not give an inch on any interest owed. So they allow overpayment with limits. Not what I had in mind but still a nice option to have.
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30-04-2021, 16:35   #71
AndyBoBandy
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Yes, we overpay by about an additional 150% on top of our standard payments.
Took 165k over 20 years, we are currently 7 years in, with only 44k remaining, and will be clear in 23-24 months.
Proposed interest over the 20 year term was to be €80k, and will end up being closer to €31k

Remember folks, if your LTV changes significantly, you could end up qualifying for a better interest rate from your bank....
It could change by either reducing the overall amount owed to fall under a certain LTV%, or you could increase it's value by simply doing work to it, again pushing you under a certain LTV%...

Example: My sister moved home from America, bought a house for €250k, they immediately renovated it, putting roughly €25-€30k onto its market value meaning their LTV% went from something like 78% down to around 65% (or whatever it was), and because of this, it qualified them for a slightly lower interest rate, which saved them something like €30 per month on their payments..... all for the price of a house valuation (which itself was paid back after a few months of the lower monthly payments).

Play around with this tool from CCPC, and see how much difference even the smallest overpayments can make to your overall payback on a mortgage...
CCPC Mortgate Overpayment Calculator
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30-04-2021, 16:41   #72
jimmytwotimes 2013
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Originally Posted by Blackjack View Post
showing your age there.
100%
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30-04-2021, 16:43   #73
smokie72
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Originally Posted by bilbot79 View Post
I reckon you have more to gain putting your money into the pension than the mortgage. Max out the pension contributions, then overpay the mortgage.
I reckon I could make around 100k easily by downsizing and moving. Use that plus my savings as an investment towards a pension.
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30-04-2021, 16:48   #74
GreeBo
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Originally Posted by BraveDonut View Post
I have a slightly different take on this.
I do have a rainy day fund that I could use to clear most/all of my mortgage.
However, I choose to continue to pay my low interest, manageable monthly amount as I see it is a form of savings.

If I cleared my mortgage and had more available cash at the end of the month, I would probably only start to spend more.
How long left do you have on the mortgage?
Seems mad to me that you would keep paying interest when you don't have to, unless you have invested your rainy day fund somewhere and its value is down?

Or put it another way, how long will your rainy day fund last you?
I certainly wouldnt advise emptying that fund, but keeping too much while continuing to pay a mortgage seems wrong. You need a much smaller rainy day fund if you have no mortgage to pay every month...
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30-04-2021, 16:49   #75
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Nope, not worth it. With the interest being so low, that money can be put to much better use.
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