This line did catch my eye - kids are very expensive so do factor this into your discussions. Extended maternity leave may also need to be planned in. A single child in creche is around 1000 euro a month, and ECCE is around a 250 euro a month discount on that when they reach 3. You could easily end up spending in excess of 40k on putting a single child through creche before they start primary school !Ages of children: None but planning to have a family.
Can I ask why if it is just the two of you?Would like to move to a bigger home in 5-10 years
Given your high mortgage level, is it a good idea to hold a holiday home? Do you get sufficient use from it to justify it, and the associated costs of holding it (insurance, maintenance, utilities etc)Do you own any investment or other property?
Holiday Home, no debt. May consider long term let of same in future
Agree 100% with above on the numbers, but there are bigger questions at play here as well regarding the short term futureYou are paying 3.7% interest on the mortgage. You will not get this on savings. Pay down what you can on the mortgage.
As far as the calculations go it is that simple.
This line did catch my eye - kids are very expensive so do factor this into your discussions. Extended maternity leave may also need to be planned in. A single child in creche is around 1000 euro a month, and ECCE is around a 250 euro a month discount on that when they reach 3. You could easily end up spending in excess of 40k on putting a single child through creche before they start primary school !
Can I ask why if it is just the two of you?
Given your high mortgage level, is it a good idea to hold a holiday home? Do you get sufficient use from it to justify it, and the associated costs of holding it (insurance, maintenance, utilities etc)
Agree 100% with above on the numbers, but there are bigger questions at play here as well regarding the short term future
Finally, would you consider leveraging the rent a room scheme in the short term while there is only the two of you and use it to pay down the mortgage? Depending on location you may have the option of a 5 day letting agreement for example that may work well for both sides. I know lots who done this in London over the years. You can earn up to 14k odd tax free on the spare room(s), which equates to the annual savings. This will become much harder if you decide to have kids and will want your space even more !
Congratulations Seabass. Enjoy you lie ins now because they will become a thing of the past for years to come!!
Gnf has given you very good advice. You are saving €1,300 a month at present. If creche is going to be a cost, there's €1,000 of your €1,300 gone. If you want to trade up, you will need a 20% deposit for the new house. With very little equity in your current home, you are going to have to save most of that 20% yourself. So your short term goals require cash liquidity. You will not see a benefit from overpaying your mortgage for decades to come.
What if there is another property crash and the value of your home falls? You owe less granted but the value of the property may have fallen by more. You are taking an element of investment risk by putting money into a mortgage that you intend to use as savings in the future. It could work out well if values continue to increase. It could be a disaster if there's a crash.
Steven
www.bluewaterfp.ie
In that scenario he will have a deposit but he'll also have a lot of negative equity. Assuming everything else stays the same (earnings, monthly saving etc), if there is a property crash he'll likely struggle to get a mortgage on a more expensive place either way. At least by overpaying on his mortgage, if they keep paying the same amount per month (or even more) then they'll be putting money against the capital part of the mortgage that would have gone on interest. Overall equity + savings will be better if they use savings to pay off the mortgage. The further away this hypothetical crash is the better off they are paying down the mortgage.
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