Paying excess of mortgage p/month advice

[positivenote]

hi all,
looking for advice on this one. We are on a tracker with PTSB and will have 20 years left on a 30 year mortgage next april. At the min there's around 270-280k left to pay and we are currently paying out €1160 p/month. At the peak of the repayments we were paying closer to €1500 a month and we have always ensured that we had at least that amount spare in the account after our repayment. over the years this excess amount in our account has gone up and we were thinking about contacting PTSB to see what benefits there would be if we tried to set it up that we were paying €1400 p/month off our mortgage. This would mean that there would be at least an additional @240 p/month being contributed towards paying the mortgage off.
Im looking for advice as to whether this is a good idea and what benefits we might gain, notably getting to mortgage free a year or two earlier than we are currently gearing towards. Are there options for doing this that will ensure that we stay on the tracker that we are on or are there other ways in which we could knock a few years off the mortgage.
thanks a million

 

[Sarenco]

This is really just another way of asking whether you should pay down your mortgage ahead of schedule or whether you should invest your savings elsewhere.

Assuming you don't want to take on any significant additional investment risk and you have sufficient cash reserves to meet your anticipated expenses and any uninsured emergencies that might arise, it really comes down to whether you could get a better rate of interest (less DIRT and PRSI, if applicable) on an instant access deposit account than the rate you are currently paying on your mortgage (less mortgage interest relief, if available).

Deposit rates have fallen to such a low level (and DIRT is levied at such a high rate) that, all other things being equal, it now invariably makes financial sense to pay down a tracker ahead of schedule. Bear in mind though that you lose the flexibility of having the liquid cash available to you.

 

[Gerry Canning]

Positive note.

By paying back 250 per month more you have an important benefit, well beyond the shortening of mortgage.

At some time in future, rates will probably rise, if they do, you have already created a 250 cushion,(that 250 covers you 0n near a 2% rise,) so you won,t be hit by having to cut back elsewhere.
If you are very disciplined you could save the 250 , but if its already gone into mortgage, that temptation is gone.