Moneymakeover Turning 40, getting worried about slow mortgage pay-off

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Newtotheparish

New Member
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Hello. Long time lurker here. I'm turning 40 very soon. Hope you don't mind if I do a little check-in. Sorry, think I used an older template below...

Age:
39 & 11/12
Spouse’s/Partner's age:
n/a

Annual gross income from employment or profession:
€76,500. About to start a job where I'll be starting on €81k going to around €100k

Monthly take-home pay: Currently €1844 every two weeks.
€720 once a month on rent a room scheme. Guy moving out soon, could easily get €850/€900 with new person.
Do odd jobs like translations. Recently made €2,700 on a job (after tax). These side gigs will be less in new job.

In general are you:
saving ... but random amounts. No set savings that gets sent anywhere. Was very disciplined for ten years. Saved a lot, built a house.

Type of employment:
Public Sector

Expenditure pattern:
I buy risky shares on Revolut after wine. Bitcoin after gin.

Rough estimate of value of home
€500,000..... not sure but a house around the corner that is worse than mine sold for that.
Mortgage on home
€175,000 . €627 a month....27 years left....feels never ending
Mortgage provider:
AIB
Type of mortgage: Tracker, interest only, fixed rate
Fixed until 2027. Worried about what will come next if I up payment now.
Interest rate
2.1% green mortgage

Other borrowings – car loans/personal loans etc
About €9k left on a loan I had to take out to finish my house build. (Have paid off €27k in last 3 years, including interest, of that loan).

Do you pay off your full credit card balance each month?
Yes. Only have it for car rental abroad.

Savings and investments:
Was flat broke 3 years ago after house build (waiting for payday to buy food etc), so only slowly getting back on feet after that. V slow to let go of savings to pay debt...
€1,000 in current account
€8,000 savings in a Revolut vault making 2% for a secret project I don't want to reveal here.... Can't use this for CU loan.
€13,000 in Revolut shares. Mix of ETFs/ shares. Doing pretty well.
€1,300 in Degiro on a few shares there. I know I should probably invest here more. But it takes a few days for money to transfer over.
€790 credit union locked in til I pay off loan.
€1,000 crypto (I know, I know, I have regrets. Not-so-proud owner of some Doge coins)

Do you have a pension scheme?
Just public service but I was late-ish (26) starting but was not on full hours at the beginning so want to pay back the pension of the years I was part-time. At least I'm pre 2013, so the better public service one.

Do you own any investment or other property?
No.

Ages of children:
None.

Life insurance:
No

What specific question do you have or what issues are of concern to you?

Main thing is the mortgage. It's only €14k lower than when I started (paid for a lot of the build with cash I'd saved). People often say here it's better to invest/do AVCs than pay off mortgage. I think here I'm an exception? If I keep paying at that woefully slow rate, I'll be paying until I'm 67.
Is €627 not ridiculously low for my salary (I was earning €10/15k lower when taking out mortgage).

I know having savings and a loan stands out. And I should have paid it off already with the Rent a Room money. But, I saved a long time to build, then was broke building, and have been having fun since. The interest seems to be negligible now. I seem to have paid it all at the beginning. But I know, I should clear it....As a single person I need a buffer for my sanity. And I've a car as old as some of you.

I feel I should have insurance of some sort. Income protection? Specified illness? I only have health insurance the last two years. Maybe it's time for the next step in adulthood.

Life insurance if I've no spouse/kids? Would I get that just so my siblings inherit a house mortgage free? They'll still have a lot of inheritance tax to pay, will probably have to sell the house to pay it. Not sure re this. But if it's cheap then maybe I should have it so someone can keep my house.

Any other advice? I feel I should pay back years to get my pension up to date. For my age I really don't have the correct amount of years done. About to start a new job, so would like a fresh start, and pay what I should (AVCs etc).

Retiring early isn't a major factor in my plans. I like working and have a low stress job, high satisfaction job. Main concern is how to 'do life' on one salary. I need to balance paying mortgage, investing, rainy day fund, some day replace car, pay pension catch-up etc.
 
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Newtotheparish said:
Other borrowings – car loans/personal loans etc
About €9k left on a loan I had to take out to finish my house build.
Click to expand...
Newtotheparish said:
Savings and investments:
Was flat broke 3 years ago after house build (waiting for payday to buy food etc), so only slowly getting back on feet after that. V slow to let go of savings to pay debt...
€1,000 in current account
€8,000 savings in a Revolut vault making 2% for a secret project I don't want to reveal here.... Can't use this for CU loan.
€13,000 in Revolut shares. Mix of ETFs/ shares. Doing pretty well.
€1,300 in Degiro on a few shares there. I know I should probably invest here more. But it takes a few days for money to transfer over.
€790 credit union locked in til I pay off loan.
€1,000 crypto (I know, I know, I have regrets. Not-so-proud owner of some Doge coins)
Click to expand...
You should clear the €9K loan and maybe put a chunk of the rest of your savings/investments off your mortgage. It makes little sense to have significant savings when you have an unsecured loan. And a mortgage.
Newtotheparish said:
Do you have a pension scheme?
Just public service but I was late-ish (26) starting but was not on full hours at the beginning so want to pay back the pension of the years I was part-time. At least I'm pre 2013, so the better public service one.
Click to expand...
I don't understand public service pension issues but maybe you should also be looking at AVCs?
 
Newtotheparish said:
Expenditure pattern:
I buy risky shares on Revolut after wine. Bitcoin after gin.
Click to expand...
Stop doing this or stop drinking.
Newtotheparish said:
Mortgage on home
€175,000 . €627 a month....27 years left....feels never ending
Mortgage provider:
AIB
Type of mortgage: Tracker, interest only, fixed rate
Fixed until 2027. Worried about what will come next if I up
Click to expand...
I don't understand what this means.
Newtotheparish said:
Is €627 not ridiculously low for my salary (I was earning €10/15k lower when taking out mortgage).
Click to expand...
Look at increasing your repayments to accelerate repayment of the loan. Check with your lender what, if any, penalty may apply for lump sum or regular accelerated repayments.
Newtotheparish said:
Life insurance if I've no spouse/kids? Would I get that just so my siblings inherit a house mortgage free? They'll still have a lot of inheritance tax to pay, will probably have to sell the house to pay it. Not sure re this. But if it's cheap then maybe I should have it so someone can keep my house.
Click to expand...
Don't you have mortgage protection life insurance? Lenders normally require it and it clears the mortgage if you die during the loan term. If your siblings inherit the house and they have to sell it to clear the mortgage and/or inheritance tax then so what, that won't be your concern at that stage and even after selling they will still be better off.
Newtotheparish said:
I feel I should have insurance of some sort. Income protection? Specified illness?
Click to expand...
That may depend on how you would fare should you be unable to work.
 
Thanks for the feedback.

I dont seem able to quote. WanderingDazed - I mean I can't use that €8,000 to pay off the loan as it is earmarked for a big expense I have coming in the next year.

And ClubMan :
Type of mortgage: Tracker, interest only, fixed rate
Fixed until 2027. Worried about what will come next if I up

That means that if I raise my contribution to the mortgage to €1,000 when I'm at 2.1%. I'm worried about what will happen if my next rate is 3.5% or higher.

No, I don't have any kind of mortgage protection. I had it but was advised to get rid of it as it was expensive. But I may look into it again now.

Thanks again
 
You should not be remotely worrying about your mortgage.

€175k@ 2% is very cheap borrowing. AIB has very cheap rates for green mortgages so you are with the right lender.

At this interest rate, you should not be overpaying it now. You should revisit this decision in 2027 when the fixed rate ends and it will depend on what rates are available then.

Because you have chosen a long term, the repayment is low and of course the loan won't be repaid until you are 67, but so what? Here is the amortisation schedule. You are knocking down the balance by €5k a year.

1747984803279.png

27 years might seem like a long time, but for the last few years, the balance will be low.

And, at any time, you will be able to up your repayments and pay it off earlier.
 
Newtotheparish said:
€8,000 savings in a Revolut vault making 2% for a secret project I don't want to reveal here.... Can't use this for CU loan.
Click to expand...

So, you need to look at your whole savings and borrowings in total and not in separate "vaults".

You have €25k savings and a €9k loan. What interest rate are you paying on the loan? Probably 9% , so you are pay €800 a year unnecessarily.

You are saving for a project. I assume that is in the immediate or short term future. You should not have any money in crypto or shares as you may need to cash it and the shares or crypto may have fallen.

So repay the loan.

That will leave you with €16k for your project.

And if you need more, the CU will be delighted to give you a loan.
 
Newtotheparish said:
As a single person I need a buffer for my sanity. And I've a car as old as some of you.
Click to expand...

As a public servant with a CU record, you need a very small buffer. You are unlikely to lose your job suddenly and if you do, you will get a great "buffer" in redundancy.

You should plan on replacing the car, but again, the CU will fund that comfortably.

But all in all, don't overpay the mortgage when it's so cheap and don't worry that you will still owe €50k when you are 60.
 
You should also do a full tax review to see if you are claiming for everything you can. Do you work from home for example, have you claimed for everything you can from a Health perspecitve.

As for the mortgage, you should be able to overpay every month given the rent a room and your salary. Indeed, given the fact that your mortgage payments are quite low, a review of everything else you are spending would not be a bad idea
 
Newtotheparish said:
No, I don't have any kind of mortgage protection. I had it but was advised to get rid of it as it was expensive.
Click to expand...
You probably do have a mortgage protection policy in place, I don't think a bank will give you a mortgage without one. So if you die that mortgage will be cleared and the house could pass to your siblings.

You should make a Will so it is clear what should happen to your estate and appoint one of your ?younger siblings as executor.

There are threads on here about buying back pension years. It's expensive. You will have a decent public sector pension and full state pension too if you keep going until you can get it.

So you might be better off just building a large pension fund from AVCs with a low cost provider. Leave it all invested in a low cost global equity index fund all the way until the end of your days.

On your salary and the rent a room option you haven't much to worry about, just keep maxing out your AVCs instead of putting money in crypto!
 
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Peanuts20 said:
You should also do a full tax review to see if you are claiming for everything you can. Do you work from home for example, have you claimed for everything you can from a Health perspecitve.

As for the mortgage, you should be able to overpay every month given the rent a room and your salary. Indeed, given the fact that your mortgage payments are quite low, a review of everything else you are spending would not be a bad idea
Click to expand...

Thanks peanuts. Yes, I definitely claim all I can tax-wise and I do my medical expenses on the PAYE website every January when I'm inputting my Rent a Room income and I claim my WFH days (electricity bills etc). I became an expert in all that stuff in the 10 years of saving for the house build!

I bought a fancy Excel doc on Etsy and track all my expenses every month. I have a fair bit left over, so now hoping to put it to good use.
 
Newtotheparish said:
I have a fair bit left over, so now hoping to put it to good use.
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You also have a good bit of savings which you should put to good use first.
Brendan Burgess said:
You have €25k savings and a €9k loan. What interest rate are you paying on the loan? Probably 9% , so you are pay €800 a year unnecessarily.

You are saving for a project. I assume that is in the immediate or short term future. You should not have any money in crypto or shares as you may need to cash it and the shares or crypto may have fallen.

So repay the loan.

That will leave you with €16k for your project.

And if you need more, the CU will be delighted to give you a loan.
Click to expand...
 
CharlieMac said:
You probably do have a mortgage protection policy in place, I don't think a bank will give you a mortgage without one. So if you die that mortgage will be cleared and it could pass to your siblings.

You should make a Will so it is clear what should happen to your estate and appoint one of your ?younger siblings as executor.
Click to expand...
I had it and got rid of it, as it was expensive, and I found it online cheaper through same provider (mine was originally through AIB and was more expensive for same cover as going directly to the insurance company). But I will get on that again, I meant to sign up to the cheaper one. And yes, I think a will would be a good idea. Thanks.
 
Newtotheparish said:
€8,000 savings in a Revolut vault making 2% for a secret project I don't want to reveal here
Click to expand...

When does this secret project commence? You could pay off the loan and use the loan repayment + savings to rebuild the fund.

You have low debt, low mortgage, relatively high income. I would be focusing on AVC's for the medium term. Maximise time in the market for tax free returns.
 
As regards future pension, you need to establish some facts.

How much service have you now?
You started at 26; you are now 39 with some part-time employment.
Is the part-time pensionable?

What is your normal retirement age?
If 65, you have 26 years to do, plus whatever cumulative service you have since 26. That might not be bad and you will have also have a good salary for pension purposes.

Can you work beyond 65?

Once you have these answers, you can look at AVCs/buying service and to what extent that is a priority and when it is a good time to do so, given your overall situation.
 
Newtotheparish said:
I buy risky shares on Revolut after wine. Bitcoin after gin.
Click to expand...
Experiment with rollerblading or kick-boxing or archery or something else mad to get your fix of adrenaline.

You say the mortgage feels never-ending. I get it, it can be hard to stick with a goal that's 27 years away. My suggestion is, instead of making a paid-off mortgage your goal, set yourself a net worth goal instead. It can be for 2/5/10/20 years, whatever you like. That way, you can track and feel real progress sooner.
 
gaelic_oc said:
You say the mortgage feels never-ending. I get it, it can be hard to stick with a goal that's 27 years away.
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You should also bear in mind what @Brendan Burgess said earlier in relation to amortisation and the fact that as time passes you'll be paying much more capital than interest and thus owning more and more equity in the property so you're gradually gaining more and more ownership of the property. It's like a race where you start off running slowly but continuously pick up speed until the finish line...
Brendan Burgess said:
Here is the amortisation schedule. You are knocking down the balance by €5k a year.

1747984803279.png


27 years might seem like a long time, but for the last few years, the balance will be low.
Click to expand...
Here's a similar amortisation schedule in graph form - note how repayments gradually comprise more and more capital and less and less interest as time passes:

Screenshot_20250524_105909.jpg
 
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Thanks everyone.
Yes, that schedule is good to think about. I forgot that it would get better. Just seems to be going very slowly at the moment. But as you say, it's because it's all interest at the moment. I have a colleague on the same salary, raising two kids on her own, and pays €1,200 a month. So I was wondering should I be doing that (as I had a lower salary when the mortgage was signed off on).

Lots to think about. I'll certainly look into AVCs.
 
Newtotheparish said:
So I was wondering should I be doing that (as I had a lower salary when the mortgage was signed off on).
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Brendan Burgess said:
You should not be remotely worrying about your mortgage.

€175k@ 2% is very cheap borrowing. AIB has very cheap rates for green mortgages so you are with the right lender.

At this interest rate, you should not be overpaying it now. You should revisit this decision in 2027 when the fixed rate ends and it will depend on what rates are available then.
Click to expand...
 
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