Personal details
Age: 45
Spouse’s/Partner's age: 44
Number and age of children: 1 @ 11yrs
Income and expenditure
Annual gross income from employment or profession: 90k
Annual gross income of spouse: 35k
Monthly take-home pay We pay ourselves expenses as required as opposed to a monthly salary, and save the remainder.
Type of employment: Both self-employed directors of limited company. 50k of my yearly income is tax exempt (this goes straight into savings)
In general are you:
(a) spending more than you earn, or
(b) saving?
Saving
Summary of Assets and Liabilities
Family home worth approx €800k with a €250k mortgage
Savings of €800k cash
Defined Contribution pension fund: €100k x 2
Shares : 15k approx invested in stock market
Family home mortgage information
Lender Pepper Finance - Interest only tracker
Interest rate ECB .05
If fixed, what is the term remaining of the fixed rate? Principal redemption date 2029.
Other borrowings – car loans/personal loans etc None
Do you pay off your full credit card balance each month? Yes
If not, what is the balance on your credit card?
Do you have a pension scheme? Yes, as above
Do you own any investment or other property? No, but we sold one at a 200k loss six years ago.
Other information which might be relevant
Life insurance: Mortgage protection insurance
What specific question do you have or what issues are of concern to you?
Thanks to our interest-only tracker, we've been saving aggressively for the last few years while our daughter is in primary school, with the intention of a PPR trade up once she starts secondary in a bigger town (next year.)
Our current PPR is according to estate agents an easy sell, a modern architect designed house on a good-sized plot, close to all amenities in a nice little village, but no longer as good a fit for our needs - we don't want a long and busy school commute to the bigger town and we can well afford an upgrade.
Seems straightforward except we've been looking and the cost of houses in the town we want to move to are imo excessive given the quality - mostly tired 90s construction with postage stamp plots on top of neighbours and needing a lot of remedial work - not at all what you'd hope for on a 1.2mish budget. The area is very sought after, lively seaside location with a thriving cafe/restaurant culture, good transport links to Dublin etc.
With a recession/downturn apparently looming, and having previously bought another property at peak in 2007 (since sold at a loss - effectively wiping out our savings at the time) my wife is adamant that we should sell our current PPR while the market is good, and use the 500k or so equity plus savings to buy the new place anyway.
We're all in agreement about a move and don't want to stay put, but to my mind it's a spend of 500k for basically a lifestyle move, since the house would in reality be a trade-down compared to what we have now.
My feeling is that it might be better to keep our current PPR, (could rent for approx 3k or more pm, which we would ring fence and use to pay off the balance at redemption in 7 yrs time) and use our 800k savings and some borrowing to buy a smaller place in the town we want, and maybe add value as we go, without necessarily throwing the kitchen sink (equity and savings) into one house, potentially at the top market cost.
But she is worried about past experience, the ongoing erosion of landlord rights and potentially delinquent tenants, and feels while the market is still good, we should just take the equity and run. Leaving us in the area we want to be, mortgage free with a more expensive, albeit inferior, home to the one we have now.
I just get the sense that this is not a great use of our money - we're still a bit young to be mortgage free, especially when we can easily afford to pay a mortgage, pension etc, and given our income setup, could probably do with more assets anyway? My career is well-established and my field largely recession-proof.
To me, buying a smaller place in the better area still suits our needs, feels like a safer use of our money, and depending on the house, we could even add value over time.
The risk of course is that we're again buying at the top of the market, with regard to renting landlord rights may well be eroded even further, or indeed the value of both houses, but at least we won't have all our eggs in one basket? Though perhaps I am being too cavalier about the risks in general.
I'd be grateful for the benefit of the forum's thoughts on the situation as outlined. Thank you.
Age: 45
Spouse’s/Partner's age: 44
Number and age of children: 1 @ 11yrs
Income and expenditure
Annual gross income from employment or profession: 90k
Annual gross income of spouse: 35k
Monthly take-home pay We pay ourselves expenses as required as opposed to a monthly salary, and save the remainder.
Type of employment: Both self-employed directors of limited company. 50k of my yearly income is tax exempt (this goes straight into savings)
In general are you:
(a) spending more than you earn, or
(b) saving?
Saving
Summary of Assets and Liabilities
Family home worth approx €800k with a €250k mortgage
Savings of €800k cash
Defined Contribution pension fund: €100k x 2
Shares : 15k approx invested in stock market
Family home mortgage information
Lender Pepper Finance - Interest only tracker
Interest rate ECB .05
If fixed, what is the term remaining of the fixed rate? Principal redemption date 2029.
Other borrowings – car loans/personal loans etc None
Do you pay off your full credit card balance each month? Yes
If not, what is the balance on your credit card?
Do you have a pension scheme? Yes, as above
Do you own any investment or other property? No, but we sold one at a 200k loss six years ago.
Other information which might be relevant
Life insurance: Mortgage protection insurance
What specific question do you have or what issues are of concern to you?
Thanks to our interest-only tracker, we've been saving aggressively for the last few years while our daughter is in primary school, with the intention of a PPR trade up once she starts secondary in a bigger town (next year.)
Our current PPR is according to estate agents an easy sell, a modern architect designed house on a good-sized plot, close to all amenities in a nice little village, but no longer as good a fit for our needs - we don't want a long and busy school commute to the bigger town and we can well afford an upgrade.
Seems straightforward except we've been looking and the cost of houses in the town we want to move to are imo excessive given the quality - mostly tired 90s construction with postage stamp plots on top of neighbours and needing a lot of remedial work - not at all what you'd hope for on a 1.2mish budget. The area is very sought after, lively seaside location with a thriving cafe/restaurant culture, good transport links to Dublin etc.
With a recession/downturn apparently looming, and having previously bought another property at peak in 2007 (since sold at a loss - effectively wiping out our savings at the time) my wife is adamant that we should sell our current PPR while the market is good, and use the 500k or so equity plus savings to buy the new place anyway.
We're all in agreement about a move and don't want to stay put, but to my mind it's a spend of 500k for basically a lifestyle move, since the house would in reality be a trade-down compared to what we have now.
My feeling is that it might be better to keep our current PPR, (could rent for approx 3k or more pm, which we would ring fence and use to pay off the balance at redemption in 7 yrs time) and use our 800k savings and some borrowing to buy a smaller place in the town we want, and maybe add value as we go, without necessarily throwing the kitchen sink (equity and savings) into one house, potentially at the top market cost.
But she is worried about past experience, the ongoing erosion of landlord rights and potentially delinquent tenants, and feels while the market is still good, we should just take the equity and run. Leaving us in the area we want to be, mortgage free with a more expensive, albeit inferior, home to the one we have now.
I just get the sense that this is not a great use of our money - we're still a bit young to be mortgage free, especially when we can easily afford to pay a mortgage, pension etc, and given our income setup, could probably do with more assets anyway? My career is well-established and my field largely recession-proof.
To me, buying a smaller place in the better area still suits our needs, feels like a safer use of our money, and depending on the house, we could even add value over time.
The risk of course is that we're again buying at the top of the market, with regard to renting landlord rights may well be eroded even further, or indeed the value of both houses, but at least we won't have all our eggs in one basket? Though perhaps I am being too cavalier about the risks in general.
I'd be grateful for the benefit of the forum's thoughts on the situation as outlined. Thank you.