My €4k comment refers to paying 35k off the mortgage based on the calculator saves me 3 years and 3 months off the term so reducing term to 20 years and saving €31,386.37 on interest. The difference between the two €3,613.63. My question being i hand over €35k i save €31.3k so is this not a wise means of utilizing the savings i currently have?@Jollyman
I used the uk site Mortgage Overpayment Calculator for my calculations. The numbers are in £ but its the same calculation
331308 for 23 years at 3% puts the repayment amount at 1660 per month and 458,980 in total
Paying 35k off this today, and keeping the monthly repayment at 1660, the total amount to be repaid is 427,770, and you clear our mortgage 3 years 3 months earlier.
Thats an overall saving of 31,210 over the lifetime of the mortgage. However that does not take into account the time value of money
I cannot see a 4k comment - but I do see a 1200 saving in interest per year => 35% @ 4% - if that helps
Ages 10Months, 2 Years, 5 Years and 7 Years.@Jollyman from a personal perspective, I aggressively paid down my mortgage for a while and had the benefit of redraw on it (another long story and multiple treads on here on it) and over the last few years it gave us lots of options. It allowed my wife take a work sabbatical, and allow us take an extended holiday the summer gone by.
It has also allowed us to pay into an 'education' fund and a 'renovation' fund over the last while without impacting our standard of living.
But it really depends on your time horizon and the other levels of 'liquidity' you have available, as well as the ages of the children !
You dont save the 35k as you have to pay it over to the bank. This is included in the amount paidMy €4k comment refers to paying 35k off the mortgage based on the calculator saves me 3 years and 3 months off the term so reducing term to 20 years and saving €31,386.37 on interest. The difference between the two €3,613.63. My question being i hand over €35k i save €31.3k so is this not a wise means of utilizing the savings i currently have?
So another 10 years before you will need it at the earliest, assuming you are not paying for private secondary schoolAges 10Months, 2 Years, 5 Years and 7 Years.
On paper he has saved 44k, but that saving isn't in cash ready to pay for any college fees. It's all tied up in equity on the house and not easily accessible.So if he pays €30,000 off his mortgage
He will have reduced his mortgage balance by €44,000 after 10 years.
Some or all of the mortgage (capital and interest) repayments could be redirected into a suitable medium/long term investment in the meantime in order to provide for third level expenses etc. Reducing debts saves money by avoiding interest charges.On paper he has saved 44k, but that saving isn't in cash ready to pay for any college fees. It's all tied up in equity on the house and not easily accessible.