Pay down home mortgage on a 1% tracker

[Poc-ar-buille]

Hello

This is a follow up on an earlier post

I owe 30k on home and paying 200 per month tracker 1.05%. At this rate it will be 14 years to pay off. By which time I will be 69. And retiring at 65, it will run into retirement.

I have 11k in shares

I'm trying to decide…
1 keep shares as is
2 sell shares and start build up cash in credit union
3 put 11k off home loan which will reduce term by 4.5 years

If I could clear the loan it would be no brainer, but only paying one third makes it questionable.

And I have little in way of savings.

If I accelerate the repayment it could mean having extra 200 per month if I can clear the loan.


Another idea might be to keep 6k shares and pay down 5k on mortgage.

And combine that with increase in repayment to say 400 per month

 

[NoRegretsCoyote]

You don't give us a picture of your broader circumstances so it's hard to advise.

But a tracker mortgage is the cheapest money you will ever get, basically free money when you account for future inflation.

I would hold on to the shares to cope with contingencies. Once you pay the tracker back you won't be able to borrow it again.

 

[Brendan Burgess]

And I have little in way of savings.

This is the bit that worries me.

If you have little in the way of savings, you absolutely should not have all your savings in shares.

Those shares could halve tomorrow and you would have even less in savings.

So the first decision is clear. Sell your shares.

Now, the question is
"I have €11k on deposit at 0%, should I clear my mortgage which is costing me 1% interest a year?"

I would say that the answer is no!

1% of €11,000 is €110 a year. So you are paying a "premium" of €110 to have access to €11,000. Seems like a price worth paying.

Caveat: Is there any danger that having €11,000 in cash would tempt you to spend it frivolously? If so, pay down your mortgage.

 

[Brendan Burgess]

You don't give us a picture of your broader circumstances so it's hard to advise.

I see that this is now the third time you have been asked for all the information.

Mortgage repayments in retirement

Age: 55 I am due to retire in 2030 age 65. I am looking for opinions on carrying repayments into retirement : two loans extent until 2035 and two loans until 2045. Already contributing to pension, and hope to have a decent defined contribution pension. Currently rental income on Invest1 is...

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It appears that you have two investment properties and children going to College next year and a history of arrears.

You need to do a full Money Makeover in the following format.

Key Post - Basic information required for the "Money Makeover" forum

It can be difficult, but please try to use a meaningful title in your thread For example "27 year old with mortgage arrears". You will get a much better and much more coherent answer if you give as much information as possible in your first post. For example, if you give your mortgage rate, it...

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Brendan