PAY DOWN MORTGAGE ON RENTAL PROPERTY?

JJ47

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Age: 45
Spouse’s/Partner's age: 43

Annual gross income from employment or profession: 35000
Annual gross income of spouse:55000

Monthly take-home pay 4500

Type of employment: public servants

In general are you: Saving
(a) spending more than you earn, or
(b) saving?

Rough estimate of value of home €250000
Amount outstanding on your mortgage: nil
What interest rate are you paying?

Other borrowings – nil

Do you pay off your full credit card balance each month? yes
If not, what is the balance on your credit card?

Savings and investments: 150k (130k earning about 1%, 20k c.u earning less tham 0.5%)

Do you have a pension scheme? work pensions

Do you own any investment or other property? yes worth about €85k mortgage of €55k

Ages of children: 7,10,13,15

Life insurance: yes (only 120k)

Hi

I am wondering would it be more beneficial to pay off rental property mortgage. I have about 11 years left to pay on 55k. my mortgage is €523 per month while income from property is €473 (less any expenses that may occur). I am subsidising mortgage of €600 per annum. I always believed it was beneficail to have a mortgage on the property in order to write off the interest on tax return, however, i am wondering is there any benefit of it at this stage, due to the small amount of mortgage interest and it being only 75%. Anybody advise please?
 
Last edited:
I can't see any good reason not to pay off the mortgage in these circumstances. Go for it!
 
Unless you can get more that 3.95% x 75% x 50% (assuming you pay tax at 50%) or 1.48% on the funds you should pay off the loan.
 
The mortgage is principal + ineterest

That doesn't really matter.

You will still have plenty of liquid savings after paying off the mortgage, you have no other debts, your pension/insurance arrangements look sorted and you won't get a risk-free return in excess of 1.48%, after tax, anywhere else. It's really a no-brainer in this case - pay it off.
 
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