Moneymakeover 1st home buyer & pension advice for early 30s, public sector

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sionnach

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Any and all advice appreciated. Most of my savings/deposit are locked into fixed term deposits for the next year at least but I’d like to hopefully get plans in order by then.

Personal details
Your age: 29
Not married, no plans for children. Maybe 2 cats and more staff to manage!

Income and expenditure
Annual gross income: Approx €40k, promotion to €41.5k in 2026 (details below)
Monthly take-home pay: €2400
Type of employment: Public servant. Saving more than I earn (usually 50-70% per month)

Summary of Assets and Liabilities
Very fortunate to be living with family & saving for home, no car etc.

Pensions
Previous private sector pension: €12k
Public service pension: Approx €1200 vested in SPSPS, no AVCs yet. Looking for advice below

Cash: Personal savings of €355k, further context:

- €300k inheritance/life savings in fixed term deposit​
- €20k contingency for stamp duty/legals/insurance/small furnishings​
- €20k emergency fund​
- €15k instant access savings… this will continue to grow so might just roll it into the large deposit sum or put towards potential debt concerns below​
- Potential €6k gift each year, will go into savings above​

Other savings and investments: Small sum in an off-shore fund that grew significantly since pandemic. Hoping to leave it as-is and top up gradually, however I’m preparing for any deemed disposal issues. No other debts, credit cards, loans etc.

(Potential) Home mortgage information
I’ve done some rudimentary quotes with the online calculators and got the following options, liable to change in the next year and whenever I actually chat with a broker. Based on my salary but I'd be potentially combining them with the large deposit.

AIB: €118,719 @ 2yr fixed, 3.85%, 10 years term. Monthly repayment €1200​
BOI: €165,820 @ variable rates, 3.90%, 10 years term. Monthly repayment €1000​
PTSB: €95,279 @ 3yr fixed, 4.05% 10 years term. (+ 2% cashback drawdown/monthly) Monthly repayment €975​

What specific question do you have or what issues are of concern to you?

I’m still in the early days of a new career but hoping to continue to move up within the next 2-5 years if the economy stays good, it's just balancing panels with probations with mortgages. I feel like I’ve been hoarding money rather than smart investing/pensions but only got around to it in the last few years. A home in Dublin isn’t feasible but looking at surrounding counties (and commuting thanks to WFH) gives more options.

As a first time buyer: what would people recommend with the cash sum and those mortgage options above? A cash purchase of a quaint 2-3 bed apartment would be perfect but I’ve lived in enough dire dens with extortionate fees so I’m thinking a mortgage for a 2-3 bed small terrace/duplex/semi seems more realistic, given today’s prices. I’m assuming a range of €300k-€400k, knowing the average is around €360k for homes. I’d rely on the Rent A Room relief if necessary.

Pension: Once a home is sorted I’d look into maxing out AVCs for the pension, (20% in my 30s) possibly through Cornmarket as advised in Ent319’s excellent post. Then overpaying the mortgage where possible, any home improvements, investments etc. Is there anything further I could do with the single pension scheme aside from career progression?

Potential debts I could foresee;

1) Deemed disposal on off-shore investments (I’ll be saving a % towards this)​
2) Stamp Duty/Solicitor/Insurance/Furnishings (€20k contingency so far but may save more for repairs)​
3) I’ve a full license but no plans for a car in the long term; would prefer to rent/lease on the once-off​

So a current plan would be:

1) Buying a home within €300-€400k range and paying off mortgage within 10-15 years, if that’s realistic?​
2) Maxing out AVCs - 20% for 30s​
3) Overpaying on mortgage as appropriate with career progression​
4) If things get tight: Rent-A-Room relief​
5) Profit?!?​

Any and all advice/experiences appreciated, many thanks.
 
The mortgage quotes seem on the high side, talk to a broker.

Decide before you purchase whether you want to rent a room or not. I think it would suit your circumstances but it influences the kind of property you want to buy.

Start living! You’ll never be in your 20s again and voluntarily subsisting on €1,000 a month is crazy.
 
sionnach said:
Not married, no plans for children. Maybe 2 cats and more staff to manage!
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What does this mean?
sionnach said:
Pension:
Click to expand...

Key Post - Overpay mortgage or contribute to pension or do something else?

This comes up in a lot of different threads, so I will set out some principles here to kick off the discussion. I will edit it in the light of feedback. There are many options with your savings in excess of your emergency cash fund Pay down your mortgage Build up a fund to enable you to trade...
www.askaboutmoney.com
sionnach said:
Potential debts I could foresee;

1) Deemed disposal on off-shore investments (I’ll be saving a % towards this)2) Stamp Duty/Solicitor/Insurance/Furnishings (€20k contingency so far but may save more for repairs)3) I’ve a full license but no plans for a car in the long term; would prefer to rent/lease on the once-off
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I don't understand this. How would these lead to debts?
 
sionnach said:
I’m still in the early days of a new career but hoping to continue to move up within the next 2-5 years if the economy stays good, it's just balancing panels with probations with mortgages. I feel like I’ve been hoarding money rather than smart investing/pensions but only got around to it in the last few years. A home in Dublin isn’t feasible but looking at surrounding counties (and commuting thanks to WFH) gives more options.
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Your best and most important factor when applying for a mortgage is your salary. Are you really in the best position you could be in that regard? An extra 10k in income means you can draw down 40k extra.
 
The main thing that jumps out is that you earn €2400 a month and are thinking of getting a mortgage of about €1000 a month. I can't imagine any bank signing off on that. It's a few years since I've applied (well about 4), but back then you had to have X amount left to live on per month. Can't remember exact amount but it was more than €1,400.
 
There's no reason to restrict the term to 10 years now and indeed have such a high monthly repayment. You could get a 20/25 years term and repay quickly if you can.
 
In your mortgage quotes you use a 10 year term. Switch this to 20/25 or 30 years. You can always pay down faster but you’ll get the mortgage initially for a longer term - banks will only allow this.
If your looking to spend 359-400k for a home your almost in a position to buy without a mortgage so look at that.
 
Even in today’s market, you could buy an apartment in central Dublin outright for €350k.

Each to their own, I suppose, but that’s where I’d want to be in my 20’s.

As a public servant, you don’t really need much of an emergency fund so don’t worry about spending down your savings.

And as others have said - live a little! You won’t be young forever.
 
sionnach said:
Monthly take-home pay: €2400
Type of employment: Public servant. Saving more than I earn (usually 50-70% per month)

Summary of Assets and Liabilities
Very fortunate to be living with family & saving for home, no car etc.
Click to expand...
You are living on €700-1200 per month while living at home. You are being heavily subsidized by your family.

When you own your own home you will have a lot of additional bills that you don't have right now such as mortgage protection, home insurance, gas/electric, broadband, bins etc. Your commuting costs could change too. On your income alone, I don't think you can afford a monthly commitment of €1000 for a mortgage.

It is madness to tie yourself into an arbitrarily short term like 10 years. You should be taking the absolute maximum term available, e.g. 35 years, to give you as much flexibility as possible.

You can still overpay as much and as often as you like and you may still clear it in 10 years but it doesn't have to be a noose around your neck.

sionnach said:
BOI: €165,820 @ variable rates, 3.90%, 10 years term. Monthly repayment €1000
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Maybe a typo but this would be closer to €1675/m.

There are much better rates available than the ones you have quoted. These are usually associated with green rates but do your homework

sionnach said:
As a first time buyer:
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As a FTB, you are eligible for some grants/support depending on what you purchase. I don't think you will be able to avail of HTB because you won't meet the 70% mortgage criteria.

The FHS might be more applicable so it is worth researching to understand what it can do for you. It might help you to buy a newer or better located property than you originally planned

sionnach said:
2) Maxing out AVCs - 20% for 30s
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I would wait until you are in your own property to do this. I think you would struggle financially if you try to do this and take out a 10-15 year mortgage. You need to live a little too
 
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_OkGo_ said:
I would wait until you are in your own property to do this.
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I agree and that's the gist of the key post on this topic too. In brief, it generally makes sense to prioritise buying a home and getting the mortgage down to a "comfortable" level before focusing on maximising tax relieved pension contributions.

Key Post - Overpay mortgage or contribute to pension or do something else?

This comes up in a lot of different threads, so I will set out some principles here to kick off the discussion. I will edit it in the light of feedback. There are many options with your savings in excess of your emergency cash fund Pay down your mortgage Build up a fund to enable you to trade...
www.askaboutmoney.com
 
Two things stick out,

- 10 year term is a no no, go for longer and repay faster, whatever you do don’t tell the bank you will pay faster, banks want long term people in debt

- you’re not having any fun, you’re too young for being stuck in a rut managing tricky people, you may come to resent these, do something about this now, and leave the cats with your parents so you have complete freedom to go wild, I suspect rent a room scheme would be good for your life experience, you might meet a prince or princess charming….
 
Many thanks all for the input, much appreciated. I'd agree I'm tempted by the idea of a cash buy (cozy 2 bed apartment, cheaper bills) and skipping the long term pressure of a mortgage altogether.

As I mentioned those rates were calculated with the bank's online mortgage calculators (and a sliding scale for years which changed them wildly) so probably not the most accurate! I'll check with brokers nearer the time but it's good to know the option to overpay is always there so long as fees aren't involved.
 
You can usually overpay by 10% without fees, and more if you're on a variable rate. A friend of mine was in a very similar position to you. She almost went with an apartment but saw the annual management fee was over €2k. Be mindful of that.
 
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