Age:
39
Spouse’s/Partner's age:
37
Annual gross income from employment or profession:
€80,000 plus expected annual bonus 15-20%
Annual gross income spouse:
€18,500 (part-time)
Type of employment:
Me Private Sector, Spouse Public sector (contract not permanent)
Expenditure pattern:
Saver
Rough estimate of value of home
Approx Value: 245,000
Outstanding Mortgage 157,500
Interest rate 2.6% fixed to June 2023, overpaying 850 per month since August 2020. 26 years remaining (without factoring in overpayment).
Rental property (former family home)
Approx Value: 270,000
Outstanding Mortgage 110,000
Interest rate 1.25% (Tracker) 16 years remaining.
Rent 1350 per month
Other borrowings – car loans/personal loans etc
None
Do you pay off your full credit card balance each month?
Yes
Savings and investments:
Emergency/Rainy day fund - €12,000
General savings for Kids college - €15,000
Do you have a pension scheme?
Occupational Pension scheme – current value €135,000, I contribute 5% and employer contributes 10%.
Spouse small pot from previous employment value approx €20,000. Not currently contributing. No pension with current employer.
Do you own any investment or other property?
See above re former family home which we were able to hold onto when we moved house and we now rent out.
Ages of children:
13, 9, 3.
Life insurance:
2 policies linked to mortgages.
Separate death in service policy through work (x4 salary)
What specific question do you have or what issues are of concern to you?
Long time lurker in this forum looking for some advice on our own circumstances now!
We had been saving aggressively for a number of years to accumulate 20% deposit for second house and money to put into the house, for relocating back to the part of the country we grew up in. As I continued to work in Dublin 3 – 4 days per week we held onto the property in Dublin for me to stay in mid-week. Since Covid struck we have rented out the Dublin house, we haven’t been greedy (possibly naively) and we set the rent at a level that would cover the cost of the mortgage payments and the tax on the rental income (i.e. well below market going rate!).
It looks like post-Covid I may only need to be in Dublin one day per week so won’t need the property as a Dublin base, we are trying to figure out if we should continue to rent the property out or sell!
Our approach has been to almost ignore the rental income and continue to pay both mortgages as normal without reference to the rental income, and then we apply the net rental income as an overpayment on our PPR mortgage. If we hold on to the house the plan would be to continue the overpayment and when we come out of the fixed term in June 2023 LTV should be less than 60% (potentially closer to 50% LTV) so should be able to avail of a competitive rate.
Do we sell now when the market is good and in that case I’d expect us to be mortgage free which would I would think would be an amazing position to be in by 40 with 3 kids (without having received any windfalls along the way). Or do we hold on to it, continue to use the net rental income to overpay the mortgage on our PPR and probably be mortgage free on PPR and also own the rental property outright (or minimal mortgage only) by 50 or so. And then have a separate asset to earn income from and which could be sold to realise the value at any point (in this alternative I nearly see the eventual sale proceeds as being my spouse’s ‘pension pot’!).
Not sure which is the best course of action on this one and would really welcome any thoughts/comments/experience.
Thanks in advance!
39
Spouse’s/Partner's age:
37
Annual gross income from employment or profession:
€80,000 plus expected annual bonus 15-20%
Annual gross income spouse:
€18,500 (part-time)
Type of employment:
Me Private Sector, Spouse Public sector (contract not permanent)
Expenditure pattern:
Saver
Rough estimate of value of home
Approx Value: 245,000
Outstanding Mortgage 157,500
Interest rate 2.6% fixed to June 2023, overpaying 850 per month since August 2020. 26 years remaining (without factoring in overpayment).
Rental property (former family home)
Approx Value: 270,000
Outstanding Mortgage 110,000
Interest rate 1.25% (Tracker) 16 years remaining.
Rent 1350 per month
Other borrowings – car loans/personal loans etc
None
Do you pay off your full credit card balance each month?
Yes
Savings and investments:
Emergency/Rainy day fund - €12,000
General savings for Kids college - €15,000
Do you have a pension scheme?
Occupational Pension scheme – current value €135,000, I contribute 5% and employer contributes 10%.
Spouse small pot from previous employment value approx €20,000. Not currently contributing. No pension with current employer.
Do you own any investment or other property?
See above re former family home which we were able to hold onto when we moved house and we now rent out.
Ages of children:
13, 9, 3.
Life insurance:
2 policies linked to mortgages.
Separate death in service policy through work (x4 salary)
What specific question do you have or what issues are of concern to you?
Long time lurker in this forum looking for some advice on our own circumstances now!
We had been saving aggressively for a number of years to accumulate 20% deposit for second house and money to put into the house, for relocating back to the part of the country we grew up in. As I continued to work in Dublin 3 – 4 days per week we held onto the property in Dublin for me to stay in mid-week. Since Covid struck we have rented out the Dublin house, we haven’t been greedy (possibly naively) and we set the rent at a level that would cover the cost of the mortgage payments and the tax on the rental income (i.e. well below market going rate!).
It looks like post-Covid I may only need to be in Dublin one day per week so won’t need the property as a Dublin base, we are trying to figure out if we should continue to rent the property out or sell!
Our approach has been to almost ignore the rental income and continue to pay both mortgages as normal without reference to the rental income, and then we apply the net rental income as an overpayment on our PPR mortgage. If we hold on to the house the plan would be to continue the overpayment and when we come out of the fixed term in June 2023 LTV should be less than 60% (potentially closer to 50% LTV) so should be able to avail of a competitive rate.
Do we sell now when the market is good and in that case I’d expect us to be mortgage free which would I would think would be an amazing position to be in by 40 with 3 kids (without having received any windfalls along the way). Or do we hold on to it, continue to use the net rental income to overpay the mortgage on our PPR and probably be mortgage free on PPR and also own the rental property outright (or minimal mortgage only) by 50 or so. And then have a separate asset to earn income from and which could be sold to realise the value at any point (in this alternative I nearly see the eventual sale proceeds as being my spouse’s ‘pension pot’!).
Not sure which is the best course of action on this one and would really welcome any thoughts/comments/experience.
Thanks in advance!
