more off mortgage or invest

O

omurchuabu

Guest
Greetings,

I was all fired up to tear into my mortgage and pay off an extra 500 to 600 euros a month until I saw an article in the business section of one of the Sunday papers recently,which said, maybe investing the extra money instead of paying extra off the mortgage.
Any advice on my situation, which is:
Ulster bank tracker mortgage 2.95% 20 year term
Borrowed 115000 euros(owned the site and went self build,had some savings)
Outstanding balance approx 110000 euros
Remaining term 17 years approx
Current monthly payments 620 euros
Should I or should'nt I.
 
The real question is whether you will make a return on your investment that will beat the 2.95% interest you are paying on your mortgage.
 
I assume you are referring to the Sunday Times last week? I thought it was an excellent article with great sample figures. I for one focused for years on clearing the mortgage, when interest rates were falling, and the stockmarket and property market were booming. I now realise how foolish that was, but isn't hindsight great? If we all had two chances, wouldn't we be rich! Anyway, looking forward, it's not just will you beat 2.95% on your investment return that you must consider, but will you beat whatever the interest rate will be in the future. One of the reasons I focused on the mortgage way back then, was fear of a return to high teen interest rates, and also because I couldn't see the other booms coming (damn crystal ball).
 
It's all down to risk and how much of your emotional and financial well-being you are willing to stake. If you are going to have sleepless nights then you would be better off paying off your mortgage.

You could, however, get the best of both worlds and split it 50:50.

€300 into your mortgage and €300 into something like a Quinn-life tracker. You could then be in a position to pay off a lump sum at a later stage if this suited you or if interest rates escalated to an unmanageable rate at some time in the future or if your circumstances changed.

Your mortgage is low, you could probably afford to take the risk financially.

Marion :hat
 
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