Could we save money by switching mortgage providers.

[lyonsie]

Age: 60
Spouse’s/Partner's age: 60

Both retired Civil Service.

Annual gross income from employment or profession: €34,000
Annual gross income of spouse: €23,000

Monthly take-home pay €3,400

Type of employment: e.g. Civil Servant retired.

In general are you:
(a) spending more than you earn
Rough estimate of value of home €320 k
Amount outstanding on your mortgage: €68k

What interest rate are you paying?

€24k @ 1.3% (2 years left)
€44k @4.3%. (10 years left)

Other borrowings – car loans/personal loans etc

Do you pay off your full credit card balance each month?
If not, what is the balance on your credit card?

Savings and investments: None

Do you have a pension scheme? Yes

Do you own any investment or other property? No

Ages of children: Grown Up.

Life insurance: Yes


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

We contacted Bank (BOI) and enquired about consolidating our mortgages.
They would offer €68k @ 3.5% for 10 years. €672 pm
We are currently paying €1015.23 + €461.06 = €1476.29 pm
By consolidating our mortgage we would save €800 pm
We were both working full time when we took out the mortgage and all was good but as we are now
retirees and would like to pursue other projects we would like to release some equity and enjoy life.

We are looking for advice around this and are wondering if it would be advisable to maybe switch
mortgage providers and maybe get a better rate?

Not very good at all this and maybe should have done this a number of years ago but it is the
present and time to enjoy life.

Also pay (€67.38 + €42.40)=€109.38 for mortgage protection and after doing some searching can
do that for €31.00 pm. Another saving.

Thanking you, Lyonsie.

 

[Protocol]

I'm surprised you didn't pay off the mortgages with the lump-sums from your pensions.

I estimate the lump-sums to be 171k.

I am against extending the 24k mortgage from 2yrs to 10yrs, that means paying lots of interest.

 

[lyonsie]

You’re probably right in respect to our lump sums, we haven’t made good financial decisions but had good times and travelled a lot. We are now down to €68k mortgage on a house valued at €320k with 10 years left and are wondering what our best option is to reduce our monthly repayment and free up some equity.
Thanks for taking the time to look.
Lyonsie.

 

[lyonsie]

Would it be an idea to get in touch with a mortgage broker for advice and see what our options could be?

Can anyone recommend a good brokerage or are they all similar?

Thanks again.
Lyonsie.

 

[RedOnion]

A bit of reality here: You're already retired. Yes, you've a guaranteed pension, but it's not huge.

I don't know of any lender who will issue a mortgage to someone already on a pension. You also want a mortgage that you won't fully repay until you are 70 - even if you were still working you'd have limited options.

Why are BOI only offering you a rate of 3.5%? Is that fixed for the full 10 years?

By changing the term you're not saving money, you're just paying more over a longer period.

Personally, I'd get the cheaper mortgage protection. Continue to repay the smaller mortgage over 2 years. And just ask BOI to fix the remainder for up to 5 years at either 2.9% or 3% and pay it off over the 10 years.