Hi all
Hoping you can help OH and I make decision on this PTSB offer.
We have 2 tracker mortgages with PTSB on same property, one for extension.
The more expensive tracker is ECB plus 2.25% and there is a current balance on this of 116K so the max we could put in as lump sum is 55K getting premium then of 5.K leaving balance of E 55,701 - term remaining is 14 years.
We can afford to put in the 55K and still have other funds on deposit sufficient for 2 years or so living costs.
My sums are as follows - all assuming current rates
Current balance 116201 at 3.5% (ecb + 2.25%) costing 875.90 per month
Cost of interest over the term is E 30,950.20
If we pay off the 55K max and get the 5.5K bonus, new capital is 55701.
The bank have agreed to maintain term and reduce monthly payments so new monthly payment would be E 419.87 and the cost of interest over the term would be E 14,837, a saving of 16,113.20
(We do not want to maintain higher level of payment if we pay off the lumpsum and bank have agreed to this)
However if we kept the monies on deposit and allow for compound interest over 14 years at a rate of 2.708% (current best rate less dirt @27%) then E 55,000 becomes E 80,320, an increase of E 25,320, E 9,206 more than the interest saved above.
Am I missing something here or have I miscalculated? It looks like we'd need PTSB to offer much more than 10% to make it worthwhile.
Income-wise - both self employed, tough but surviving so far, no great profits, paying ourselves reduced salaries, hard to know about future.
If it makes any difference the original mortgage is E 186K, 14 years left at ECB plus .8%
Up to date with all payments, have RIP mortgage at ecb +.9% now on cap and interest. No other loans. Not in negative equity at the moment on home loan. Definitely in negative equity on RIP with 19 years left to go. Age mid and late 40s.
Sorry for long winded post but would really appreciate independent advice.
Thank you.
Hoping you can help OH and I make decision on this PTSB offer.
We have 2 tracker mortgages with PTSB on same property, one for extension.
The more expensive tracker is ECB plus 2.25% and there is a current balance on this of 116K so the max we could put in as lump sum is 55K getting premium then of 5.K leaving balance of E 55,701 - term remaining is 14 years.
We can afford to put in the 55K and still have other funds on deposit sufficient for 2 years or so living costs.
My sums are as follows - all assuming current rates
Current balance 116201 at 3.5% (ecb + 2.25%) costing 875.90 per month
Cost of interest over the term is E 30,950.20
If we pay off the 55K max and get the 5.5K bonus, new capital is 55701.
The bank have agreed to maintain term and reduce monthly payments so new monthly payment would be E 419.87 and the cost of interest over the term would be E 14,837, a saving of 16,113.20
(We do not want to maintain higher level of payment if we pay off the lumpsum and bank have agreed to this)
However if we kept the monies on deposit and allow for compound interest over 14 years at a rate of 2.708% (current best rate less dirt @27%) then E 55,000 becomes E 80,320, an increase of E 25,320, E 9,206 more than the interest saved above.
Am I missing something here or have I miscalculated? It looks like we'd need PTSB to offer much more than 10% to make it worthwhile.
Income-wise - both self employed, tough but surviving so far, no great profits, paying ourselves reduced salaries, hard to know about future.
If it makes any difference the original mortgage is E 186K, 14 years left at ECB plus .8%
Up to date with all payments, have RIP mortgage at ecb +.9% now on cap and interest. No other loans. Not in negative equity at the moment on home loan. Definitely in negative equity on RIP with 19 years left to go. Age mid and late 40s.
Sorry for long winded post but would really appreciate independent advice.
Thank you.
