Whats the remaining term in months ?
I have a variable rate mortgage with AIB, approx €190,000 left. I'm considering paying a lump sum of 60k off.
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Would this mean a big savings on interest? .
To say "That’s a saving of €53,841 over 33 years" is meaningless as it ignores the time value of money
would it be considered meaningless had I said that’s €53,841 that you will not have to pay in interest over the next 33 years.’
The only right way to assess this is to calculate the interest saved every year. To say "That’s a saving of €53,841 over 33 years" is meaningless as it ignores the time value of money
€1 saved in 2014 is completely different from €1 saved in 2047.
If you are paying 4.5% interest and you pay off €60,000, you will save €2,700 over the next year. That is the correct way of looking at it.
Brendan
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