Came into some spare cash - how best to spend

[babaduck]

I won a few bob yesterday (€10,000!!!) and will get €13,000 when my SSIA matures in August.

We have a mortgage of €140k plus a topup of €20k, both done in Sept 04 with a term of 20 years. I also have a car loan of €18,500 over 5 years taken out in Oct 04.

So... with the spare €23k, I was thinking of changing our current ICS variable mortgage to an offset one and trying to reduce the term of the mortgage if poss to 15 years and pay less interest, and just let the money sit there. Also, just pay off the car loan over the remaining 3.5 years and change my car at the end of this term

All advice welcome!!!

 

[conor_mc]

Your car loan is costing you more in interest than your mortgage, I'd clear that first.

 

[TheBlock]

You don't listen to today FM by any chance

Your plan sounds fine and makes sense to me...provided you aren't tempted to dip into the current account after you have changed the term of your mortgage.

Why would you change the car??Does it need changing or do you just fancy a newer plate???

Congrats by the way....

 

[CN624]

The downside of offset mortgages is the temptation to dip into the lump sum.
If you start to pay bills etc from it it will quickly reduce the balance.

Are you disciplined financially? Is your current account in the black at the end of the month after paying all your bills?

If the answer is yes then maybe the offset will work for you.

 

[babaduck]

You don't listen to today FM by any chance

Your plan sounds fine and makes sense to me...provided you aren't tempted to dip into the current account after you have changed the term of your mortgage.

Why would you change the car??Does it need changing or do you just fancy a newer plate???

Congrats by the way....

Eh I just might!!!

I've no need to change my car - my mileage is way too high on it to get a reasonable sum for it on a trade-in (BIL is a car dealer & warned me off getting a newer motor... his advice was to hang onto it & then use the sum I'd get as a trade-in, in 3.5 years or so)

I've no huge plans for the lump sum - I'd like to spend a small amount on a few things I've been promising myself for ages and then hold the rest in reserve for holidays etc. We've no kids, so no extra expenditure!!!

I always try to keep €300-500 in my personal current account as a reserve. Our joint current a/c typically would have €200-€300 as a reserve

 

[Dinky]

You don't listen to today FM by any chance

Was thinking the exact same thing when I saw the post!

Congrats, babaduck - what a nice surprise! I'd be inclined to clear the car loan, if it were me, then continue to put what you would have payed off the car loan against the principal of your mortgage to accelerate your repayments. Then again, I'm no financial guru, so I'd defer to the more knowledgeable posters here!