Sorry I know this theme is discussed elsewhere on this forum where I myself have already posted, but I want to be clear and get the most up to date perspective on it.
I've been reviewing my various savings accounts, many of which I set up through incentives and enticement by the various financial institutions which invariably expired after the first year, so now I am earning less than 1% interest (before DIRT) on most of my savings accounts (I'd say on average about .5 of %).
My mortgage is a <50% LTV currently at a rate of about 3.65% (but due to drop again soon) with about €115k left to pay and 21 years remaining. The repayments are very manageable at around €720 p/m and in fact I could afford to pay a good deal more each month if I diverted the money from regular savings.
The prevailing advice in the mortgage forum appears to recommend paying down the mortgage but not reducing the term, but rather the monthly repayment?
If I want to pay down lump sums from my savings (since there is a differential there of more than 3%) and I want to retain my monthly repayments as is (or possibly increase them somewhat) what are my options?
If I say pay €10k of a lump sum to the mortgage account (and similar sums in the future as I get access to them) and increase the monthly repayments, where do those extra payments go? Are they put against the capital sum or are they apportioned between capital and interest like the monthly repayments?
Ultimately, as I understand, by choosing this option it foreshortens my mortgage term below 21 years without actually entering into a direct agreement with the bank to do this? And the advantage of this is that, in the event that I get into unanticipated difficulties with my repayments some time in the future, these additional payments can be credited against my required monthly repayments, is that correct?
I also noticed where another poster had mentioned that they had an arrangement with their institution (KBC?) whereby they could lodge this money against their mortgage with the option to withdraw it again whenever required, and accordingly were effectively getting an APR on their deposit equivilent to the SVR. Is this an option available from all financial institutions?
I've been reviewing my various savings accounts, many of which I set up through incentives and enticement by the various financial institutions which invariably expired after the first year, so now I am earning less than 1% interest (before DIRT) on most of my savings accounts (I'd say on average about .5 of %).
My mortgage is a <50% LTV currently at a rate of about 3.65% (but due to drop again soon) with about €115k left to pay and 21 years remaining. The repayments are very manageable at around €720 p/m and in fact I could afford to pay a good deal more each month if I diverted the money from regular savings.
The prevailing advice in the mortgage forum appears to recommend paying down the mortgage but not reducing the term, but rather the monthly repayment?
If I want to pay down lump sums from my savings (since there is a differential there of more than 3%) and I want to retain my monthly repayments as is (or possibly increase them somewhat) what are my options?
If I say pay €10k of a lump sum to the mortgage account (and similar sums in the future as I get access to them) and increase the monthly repayments, where do those extra payments go? Are they put against the capital sum or are they apportioned between capital and interest like the monthly repayments?
Ultimately, as I understand, by choosing this option it foreshortens my mortgage term below 21 years without actually entering into a direct agreement with the bank to do this? And the advantage of this is that, in the event that I get into unanticipated difficulties with my repayments some time in the future, these additional payments can be credited against my required monthly repayments, is that correct?
I also noticed where another poster had mentioned that they had an arrangement with their institution (KBC?) whereby they could lodge this money against their mortgage with the option to withdraw it again whenever required, and accordingly were effectively getting an APR on their deposit equivilent to the SVR. Is this an option available from all financial institutions?