Should I pay off my mortgage

G

Grendel

Registered User
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Looking for some advice.

I'm lucky to have a small mortgage with variable interest rate (circa €50k). Myself and my other half recently came into a small windfall with the selling of shares from an old company we worked in. It now means, with some other savings, that we could potentially afford to pay off our mortgage in full.

Currently we have 15 years left on the mortgage with AIB, but according a calculator on their website, we could save nearly €11.5k in interest payments if we paid the full amount.

if we did decide to pay, would we be penalised in any way by the bank? And, should we pay up in full or else increase monthly payments? Obviously having this lump sum could be very useful to us (e.g. replace car, home improvements, college funds for kids, etc.), but I'm thinking that if we had no mortgage payments each month, we could then put that money into savings instead

Any advice on this would be really helpful. Thanks
 
There are no penalties for repaying variable rate early.

You need to provide more details for meaningful advice on your circumstances, and alternative uses of the money. What's your pension situation like, etc.
 
Do you have an emergency fund which could cover unforeseen expenses for a period of 3 - 6 months, such as having to replace car or emergency home repairs?
I would keep something in reserve from the windfall if you don't, e.g. €25,000 and consider using the rest as a once-off capital repayment on the mortgage to reduce the term.
 
I've been paying pension since 1997 so it's pretty good at the moment`. I'm paying around €400 per month into it. My other half has no pension though from previous employment, but now working in public sector since 2016 so started late. Not sure what you mean by "alternative uses of the money"? Are you suggesting I pay some of the Shares money into a pension?
 
Thanks for the advice. Yes, I'll definitely ensure we have some contingency fund set aside for any emergencies. But as I mentioned, I hope to use the mortgage payments as savings into a Credit Union and this should be enough for any additional emergency funds over a few years.
 
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