Hi,
Not sure if this would be better here or in pensions forum but I'll try here.
I have a mortgage of approximately 200k. Its a variable taken out in about 2006.
My property is probably now worth around 280k so I am not in negative equity (though I significant of capital went in which is now disappeared).
I am self employed. I have a tax liability for 2013 which can be reduced if I pay into a pension.
Once I pay my tax bill as it is (i.e., without paying into a pension) I will have a decent amount sitting in bank accounts. I could probably pay up to 30k off my mortgage.
Alternatively I could reduce my tax liability for 2013 by paying into a pension.
Early payment mortgage calculators suggest each 10k I pay off the mortgage will save me €600 in mortgage interest per year. Each 10k sitting in the bank will receive about €140 in interest so its definitely better value to pay off the mortgage than leave money sitting in the account.
But is it better value to pay into the pension fund?
Zurich's pensions calculator tells me I can pay and claim relief on up to 20k and will in effect 'get' 34k for that payment of 20k.
My personal circumstances are that I have not as yet started a pension and am in my mid 30s. I am happy in my current home for now but will probably be looking for somewhere bigger in about 6 years.
Anyone any views or comments on which one makes more sense?
I'm leaning towards paying off the mortgage as it frees up more money for the next few years.
Will it affect me looking for another mortgage in a few years time if I've paid this one off early? I.e. will bank like me less because I paid it off early? Will they be less likely to give me a mortgage because I don't have 100k sitting in the bank as down payment on the property (I assume I could prob just re-mortgage my existing property if this was the case).
Any thoughts appreciated, or indeed if someone could recommend a professional I'd gladly pay to make the right decision.
Not sure if this would be better here or in pensions forum but I'll try here.
I have a mortgage of approximately 200k. Its a variable taken out in about 2006.
My property is probably now worth around 280k so I am not in negative equity (though I significant of capital went in which is now disappeared).
I am self employed. I have a tax liability for 2013 which can be reduced if I pay into a pension.
Once I pay my tax bill as it is (i.e., without paying into a pension) I will have a decent amount sitting in bank accounts. I could probably pay up to 30k off my mortgage.
Alternatively I could reduce my tax liability for 2013 by paying into a pension.
Early payment mortgage calculators suggest each 10k I pay off the mortgage will save me €600 in mortgage interest per year. Each 10k sitting in the bank will receive about €140 in interest so its definitely better value to pay off the mortgage than leave money sitting in the account.
But is it better value to pay into the pension fund?
Zurich's pensions calculator tells me I can pay and claim relief on up to 20k and will in effect 'get' 34k for that payment of 20k.
My personal circumstances are that I have not as yet started a pension and am in my mid 30s. I am happy in my current home for now but will probably be looking for somewhere bigger in about 6 years.
Anyone any views or comments on which one makes more sense?
I'm leaning towards paying off the mortgage as it frees up more money for the next few years.
Will it affect me looking for another mortgage in a few years time if I've paid this one off early? I.e. will bank like me less because I paid it off early? Will they be less likely to give me a mortgage because I don't have 100k sitting in the bank as down payment on the property (I assume I could prob just re-mortgage my existing property if this was the case).
Any thoughts appreciated, or indeed if someone could recommend a professional I'd gladly pay to make the right decision.