Situation: My mam just retired and is seeking to move from West Dublin to North Dublin to be closer to family. I will likely financially support her in this move. Trying to understand what the right bets to make are, given interest rates, and the fact I'll be financially supporting some of the move and that may impact my taxes/choices.
Personal details for my Mam
Age: 63
Spouse’s/Partner's age: NA
Number and age of children: me 36 (details below), sibling 31 (currently lives at home but is sale agreed on a property in the west and hopes to move once probate is complete)
Income and expenditure
Retired, state and private pension: 388 per week combined
In general are you:
(a) spending more than you earn, or
(b) saving?
Saving, though very recently retired so hoping this will be fine.
Summary of Assets and Liabilities
Family home worth €220k - 240k, with 48k remaining on mortgage, paying 631 per month on a tracker mortgage
Savings of 90k (40k savings accrued, 50k pension lump sum just received)
Other borrowings – car loans/personal loans etc
No loans, owns second hand car worth 5k, clears credit cards
Will inherit 1/4 of family home, approx 70k, at some unknown future time
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Personal details for me
Age: 36
Spouse’s/Partner's age: NA
Number and age of children: none, none planned
Income and expenditure
Privately employed; ~150k a year income
Pension; ~45k saved, contributing 8% of salary matched w 4% from employer
Company options: ~150k, but depends on liquidity event
RSUs: 10k
In general are you:
(a) spending more than you earn, or
(b) saving?
Saving, though not as much as I'd like as have been supporting some friends through some rough times.
Summary of Assets and Liabilities
Mortgage of 375k, 260k remaining, current market value of 450k. On a 7 year fixed rate of 1.9% with Avant, just moved early 2022. 26 years remaining (I think, but aim is to clear it sooner).
Savings of 70k (accrued savings, plus some sale of shares from previous company + redundancy lump sum)
Other borrowings – car loans/personal loans etc
No loans, own second hand car worth 20k, clear credit cards
What specific question do you have or what issues are of concern to you?
Personal details for my Mam
Age: 63
Spouse’s/Partner's age: NA
Number and age of children: me 36 (details below), sibling 31 (currently lives at home but is sale agreed on a property in the west and hopes to move once probate is complete)
Income and expenditure
Retired, state and private pension: 388 per week combined
In general are you:
(a) spending more than you earn, or
(b) saving?
Saving, though very recently retired so hoping this will be fine.
Summary of Assets and Liabilities
Family home worth €220k - 240k, with 48k remaining on mortgage, paying 631 per month on a tracker mortgage
Savings of 90k (40k savings accrued, 50k pension lump sum just received)
Other borrowings – car loans/personal loans etc
No loans, owns second hand car worth 5k, clears credit cards
Will inherit 1/4 of family home, approx 70k, at some unknown future time
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Personal details for me
Age: 36
Spouse’s/Partner's age: NA
Number and age of children: none, none planned
Income and expenditure
Privately employed; ~150k a year income
Pension; ~45k saved, contributing 8% of salary matched w 4% from employer
Company options: ~150k, but depends on liquidity event
RSUs: 10k
In general are you:
(a) spending more than you earn, or
(b) saving?
Saving, though not as much as I'd like as have been supporting some friends through some rough times.
Summary of Assets and Liabilities
Mortgage of 375k, 260k remaining, current market value of 450k. On a 7 year fixed rate of 1.9% with Avant, just moved early 2022. 26 years remaining (I think, but aim is to clear it sooner).
Savings of 70k (accrued savings, plus some sale of shares from previous company + redundancy lump sum)
Other borrowings – car loans/personal loans etc
No loans, own second hand car worth 20k, clear credit cards
What specific question do you have or what issues are of concern to you?
- Should my mam clear some or all of her mortgage with her lump sum, given the rising cost of interest, in the next 3 months?
- Given she plans to move in 2023, should she deliberately not-clear her mortgage and sell, then clear the mortgage with the proceeds of the sale? Unlikely she will sell until June ish.
- Given my mam will sell her home for approx 220k (a three bed terraced house deep in a not super desirable suburb) and likely move to a 2 bed apartment on the north side that will cost up to 300k (likely), and given I will contribute up to 30k to help her do this, what is a smart/cost effective way to approach this?
- I would personally be interested in moving to a slightly bigger/different home - I purchased pre-pandemic and what I would enjoy has shifted since. Is there a world in which it's smart for me to sell/rent/give my own home to my mother (for 300k?), and get another mortgage with my own equity (assuming that 150k in options came through in the next 12-18 months).
- My own goals are to support my mam and to be mortgage free by 50 if at all possible, I do not really care about 'losing' money in supporting her and want her quality of life to be high for hopefully the next 20-30 years (and of course, it'll come back to me one day anyway). For myself, I'd love to move to somewhere with side access, a bigger back garden for a dog, and a newer build (I do not have any interest in decorating or renovating my current home). It feels like between my mam's assets and mine, and my income, this should be possible. Any guidance welcome.