Mortgage dilemma-pay off chunk?

N

Newbiemortga

Guest
I’m in my mid twenties with 50k in the bank, no dependents, free and single.
I’ve 29 years left on a mortgage of just less than €200,000.
The question is should I ‘throw’ my savings into the mortgage and reduce what I’ ve got left to pay?
1.One part of me thinks, although it’s a pain in the ar$e to wave bye-bye to my savings it’s inevitable I’ll have to pay off my mortgage so I may as well pay it.
2. Alternatively…I may want to go travelling in the future.
Would I not better keeping the saving for a ‘rainy day’ when I feel like hitting the hills?
3. Should I keep the 50k and try to buy a second property for investment purposes with my brother?
Having a second property is something I would like to do in the future but I don’t think I earn enough to do so?
Is that correct?
For the record I earn less than 35k, I don’t work in a particularly secure/state job and there’s no real increments.
Also having cash in the bank/savings, do banks/building socities actually give a dam these days or is it all about multipiles of your income?
I mean the fact that I’ve got savings and am considering paying off a chunk of my mortgage, will that make it easier for me to obtain a cheaper mortgage in the long run?
Given my circumstances what sort of mortgage should I go for and what would you do if you were in my shoes?
Thanks
The uneducated mortgage man
 
If it was me I'd pay off a chunk of the mortgage. Perhaps 30k and keep 20k as a contingency fund in the best available lump sum savings accounts. 35k salary doesn't sound like enough to have an additional mortgage on top of an existing 200k mortgage. What financial institution would lend you more? I could be wrong on that as I've a conservative attitude to risk.
 
I would have a look at savings accounts available. If you can invest the money for a good return (6%+) then you might be better off going that route. It would however make sense to pay off some of the mortgage if you are above your interest treshold for income tax. If you are going on the world tour it might be a good idea to leave a chunk of money in the current account to meet the repayments while you are away. The banks will allow you a 2nd mortgage based on your disposable income.
 
When you're comparing the interest you'd gain from a deposit account with the interest you're paying on your mortgage, don't forget to take DIRT into account.
 
I think you should put a high proportion of the sum off your mortgage - you will be reducing the term by a number of years and if you can afford it keep your same repayments or try to put a little more off each month...
 
I think you should give yourself a clap on the back for being in your position at your age. Take a well deserved round the world trip and invest the money left over on your return.
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if your planning to travel, use the 50K to pay off mortgage while gone (it gives you the option not to rent it out) and when you come back from travelling it could be a while before you get the job you want, put it in a good return savings account, but that depending on what rate you are tied into in your mortgage aswell, personnally i would prefer to have the cash in hand as its difficult enough to raise 50K from the banks afterwards, esp on a salary of 35K, and if you ever upgrade, have 50K in savings looks very well, it gives you more leverage aswell when shopping around???
 
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