Any thoughts welcomed.
You appear to manage your money well.
Even allowing for DIRT you can get a higher rate on your savings than you are paying on your mortgage, why not keep saving in a better account and keep all your options open.
Weekends tend to have lower viewings. You will probably get a lot more opinions tomorrow.
In your case I would not pay anything extra towards the mortgage. You are only paying 1.95%, your lump sum even with Dirt will earn more than that, you also receive I presume TRS, your equity is good, your mortgage very reasonable and you have a big chunk of savings should interest rates go sky high (unlikely).
I would concentrate on saving towards the house build. Maybe buy a site outright with no loan, this year should get you good value in a site and then wait a while and build when you can afford it.
Children cost money, so you need to factor that into the equation. Also is there anything you can do about getting permanent or increasing earning power. In case one of you lose your job, do you have a back up plan for that.
You are doing well.
as long as you are earning a higher percentage on your savings after DIRT than the percentage on your mortgage then you are ahead. Even if it was on par or slightly below I would definately keep the cash for rainy day money, circumstances can change and you have a nice buffer to ride the rough for a couple of years.
Another thing you can look at which I did a couple of years ago was to pay my morgage weekly I kept the same payments but obviously because my interest would be less I cut approx three years off the life time of my morgage. Bank didn't want to do it but there is no law that stops you, they will also tell you what you'll save.
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