To clear mortgage or not

H

Haille

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I have a 20 year interest only tracker mortgage since 2007 for the amount of €140,000. The interest only repayment is €58 per month.We are both aged 60 and retired.with 3 adult children. The tracker was used to purchase an investment property which yields approx €6.500 rent per annum.We are paying over €1000 per annum on life cover for the sum of €140,000. I have approx.€120,000 invested in 10 year solidarity bonds some at 25% return more at 16% return to yield the additional €20,000 to pay off the capital in 2027.
My wife recently received a pension lump sum of €88,000.We are wondering should we pay off some of the mortgage or simply invest my wife's lump sum.Should we continue to pay the life cover and wait until the existing solidarity bonds mature prior to 2027 to pay off then?
 
Who is the lender? Presumably Bank of Scotland now owned by Tanager?

If so, you have nothing to lose by asking them if they would give you a discount for early repayment.

Brendan
 
Haille said:
We are paying over €1000 per annum on life cover for the sum of €140,000.
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Why are you paying life cover of this amount?
Is it a condition of the mortgage?

It seems ridiculously dear unless one of you is terminally ill.

Life cover is required for a family home mortgage but is not a statutory requirement for a mortgage for an investment property.

What would happen if you just stopped paying it?

Are you sure it's just life cover? It sounds more like an endowment policy which will result in a lump sum at the end of the term which was designed to pay off your mortgage.

Brendan
 
Many thanks Brendan for advice.My lender was Danske Bank, mortgage now owned by Pepper. I am paying €950 in life cover as I remortgaged my main residence and it was a condition of getting the Tracker.Will try making contact with Pepper to see if they would offer some discount.
 
Are you sure that it is just for mortgage protection?

It sounds like there is a savings element in it - some form of endowment mortgage.

Check with the insurance company which issued the policy.

Brendan
 
It is life cover only , not endowment mortgage.If either of us dies before term of mortgage ends it simply pays the sum of €140,000. I contacted Pepper to see if I could get some reduction in paying off part of the capital borrowed on the tracker interest only mortgage, but they could not offer anything.
 
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