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Mortgage overpayment?

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  • 17-01-2010 8:47pm
    #1
    Matamoros
    Closed Accounts Posts: 139 ✭✭


    I have a small amount of extra money each month and am thinking would it be a good idea to pay a bit more off my mortgage. What are the pro/cons?

    I am on a variable with Perm TSB, 10 years into the loan with 120k outstanding.


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    #2
    broker2008
    Registered Users Posts: 750 ✭✭✭broker2008


    Make sure you tell them that you are planning to this and ask them how they will treat the increased payments, ie reduces the capital amount as opposed to merely lying in a suspense account waiting to be applied.

    One disadvantage is that if you have future difficulty paying off your regular mortgage there is no guarantee that the PTSB will give you a top up mortgage based on the extra increased payments. The decision will be based on the information provided for top up eg salary details, earning potential etc. Remember banks are not as quick to provide additional finance so make sure that you can afford to make these extra payments, you lucky thing !


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    #3
    Slugs
    Registered Users Posts: 1,282 ✭✭✭Slugs


    I'd be more inclined to save it, "in case of a rainy day". You don't know if you're goin to need the money at some stage in the future.


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    #4
    Priapus
    Closed Accounts Posts: 114 ✭✭Priapus


    Matamoros wrote: »
    I have a small amount of extra money each month and am thinking would it be a good idea to pay a bit more off my mortgage. What are the pro/cons?

    I am on a variable with Perm TSB, 10 years into the loan with 120k outstanding.

    If you have the money to spare and want to put it to use, reducing your mortgage will save you a lot of money in interest over the years. It is a great idea to pay down your mortgage. But as was previously mentioned, make sure you contact the bank and tell them you are marking a partial redemption. And just make sure there is a proper paper trail associated with the repayment.

    I do not see any significant cons - except that once you part with the spare cash, it is gone. But that isn't really a con relative to the question asked.


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