lambrush19
New Member
- Messages
- 9
Personal details
Age: 46
Other half: 45
Number and age of children: 3 children: 9, 7 and 1
Income and expenditure
Annual gross income from employment or profession: €87,000
Annual gross income of spouse: €66,000 (but moving to 3 day week from September)
Monthly take-home pay: circa €5,500 from September
Type of employment: Both public sector
From September, we plan to save circa €2,500 per month
Summary of Assets and Liabilities
Family home worth €600k
Cash €155k (of which a max of 30k is earmarked for the following in the autumn: (i) changing car, and (ii) refurbishing bathroom and one bedroom)
Pension: both public sector pensions
Family home mortgage information
€215k tracker with PTSB, margin is 1.8% so 2.3% is current rate
Other borrowings – car loans/personal loans etc - none
Buy to let properties
None
Other savings and investments
none
Childcare costs from September: circa 1k per month
Other information which might be relevant: None
What specific question do you have or what issues are of concern to you?
We plan to do a big job on the house. Based on a recent quote from a QS, the total cost would be circa 320k at current prices. We have decided to wait 4 years in the hope that building costs decline. However, we are also concerned about rising interest rates. If we switch, for example, to a 7 year fixed now, the best rate is 2.65 with Haven but it will probably be 3% or more by the time we are approved.
We are considering the following option: Pay down existing mortgage with cash funds (including taking an interest free loan of 50k from a close relative, to be paid back after the building work is complete): this would bring the mortgage down to circa 40k. Then save circa 120k over the next 4 years. In 4 year's time, take out loan from a bank to cover the rest of the building costs (obviously the precise amount to be borrowed will depend on building costs in 4 year's time; at current rates it would be a loan for 200k which is too much. I envisage/hope the loan will be circa 100k; we therefore may have to wait 5 (or even 6) years to do the work to build up a sufficient base of savings. This all assumes, however, that building costs are lower in 4 year's time than they are now which may not be the case.)
The question is this: are we better off fixing the mortgage now for 7 or 10 years (at probably circa 3% or more) and focusing on accumulating enough savings over the next 4 years to be able to cover the cost of the building work (with any shortfall in 4 year's time to be made up by taking an interest free loan from a close relative to be paid back post-work). Or should we pay down as much of the tracker mortgage now and just take out a loan in 4 (or 5/6) years time? In short, we are caught between wanting to avoid a relatively high mortgage rate now versus wanting to do the work no later than in 4 year's time. I'm wondering is there another option that I am missing.
Age: 46
Other half: 45
Number and age of children: 3 children: 9, 7 and 1
Income and expenditure
Annual gross income from employment or profession: €87,000
Annual gross income of spouse: €66,000 (but moving to 3 day week from September)
Monthly take-home pay: circa €5,500 from September
Type of employment: Both public sector
From September, we plan to save circa €2,500 per month
Summary of Assets and Liabilities
Family home worth €600k
Cash €155k (of which a max of 30k is earmarked for the following in the autumn: (i) changing car, and (ii) refurbishing bathroom and one bedroom)
Pension: both public sector pensions
Family home mortgage information
€215k tracker with PTSB, margin is 1.8% so 2.3% is current rate
Other borrowings – car loans/personal loans etc - none
Buy to let properties
None
Other savings and investments
none
Childcare costs from September: circa 1k per month
Other information which might be relevant: None
What specific question do you have or what issues are of concern to you?
We plan to do a big job on the house. Based on a recent quote from a QS, the total cost would be circa 320k at current prices. We have decided to wait 4 years in the hope that building costs decline. However, we are also concerned about rising interest rates. If we switch, for example, to a 7 year fixed now, the best rate is 2.65 with Haven but it will probably be 3% or more by the time we are approved.
We are considering the following option: Pay down existing mortgage with cash funds (including taking an interest free loan of 50k from a close relative, to be paid back after the building work is complete): this would bring the mortgage down to circa 40k. Then save circa 120k over the next 4 years. In 4 year's time, take out loan from a bank to cover the rest of the building costs (obviously the precise amount to be borrowed will depend on building costs in 4 year's time; at current rates it would be a loan for 200k which is too much. I envisage/hope the loan will be circa 100k; we therefore may have to wait 5 (or even 6) years to do the work to build up a sufficient base of savings. This all assumes, however, that building costs are lower in 4 year's time than they are now which may not be the case.)
The question is this: are we better off fixing the mortgage now for 7 or 10 years (at probably circa 3% or more) and focusing on accumulating enough savings over the next 4 years to be able to cover the cost of the building work (with any shortfall in 4 year's time to be made up by taking an interest free loan from a close relative to be paid back post-work). Or should we pay down as much of the tracker mortgage now and just take out a loan in 4 (or 5/6) years time? In short, we are caught between wanting to avoid a relatively high mortgage rate now versus wanting to do the work no later than in 4 year's time. I'm wondering is there another option that I am missing.
