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Pay off PTSB mortgage

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  • 21-10-2010 12:15pm
    #1
    cosmowillie53
    Registered Users Posts: 445 ✭✭


    A ptsb mortgage with four years left . Approx € 17 K
    Monthly payment is approx €420 which includes mortgage protection of I think €40 .

    Would it be a good idea to pay this off quickly for example by getting a credit union loan or by paying a higher monthly figure to ptsb.
    The mortgage protection figure seems high . The couple who have this mortgage are just short of 60 years old.

    There is about five or six grand savings at most that could be put towards payment. The couple are still working ..one part one full time.

    Any ideas on this one please.


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    #2
    Blackjack
    Registered Users Posts: 3,612 ✭✭✭Blackjack


    cosmowillie53 wrote: »
    A ptsb mortgage with four years left . Approx € 17 K
    Monthly payment is approx €420 which includes mortgage protection of I think €40 .

    Would it be a good idea to pay this off quickly for example by getting a credit union loan or by paying a higher monthly figure to ptsb.
    The mortgage protection figure seems high . The couple who have this mortgage are just short of 60 years old.

    There is about five or six grand savings at most that could be put towards payment. The couple are still working ..one part one full time.

    Any ideas on this one please.

    Paying a higher monthly figure, as much as can be afforded would be best. May want to contact PTSB to ensure they can take it, and also that they apply the overpayment to the Capital.


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    #3
    dotsman
    Registered Users Posts: 3,636 ✭✭✭dotsman


    I'm not quite sure why you would go down the route of a credit union loan. Surely that would be at a much higher interest rate than the mortgage.

    What is the rate on the mortgage? If it is very low, you would be better off putting the extra money in a deposit account. If the mortgage is at a higher rate than you could achieve via deposit, then I would consider using some of it to pay off the mortgage.

    The reason I say "consider" and not definitely is that it is always a good idea to have some emergency cash on standby. What if one of them had an accident or got ill? What if one of them lost their job next year? What if a family member got injured/sick. Would they need this money? If they have other savings tucked away for such emergencies, then yes, it would probably make financial sense to pay off some of the mortgage. If they don't, then I think it would be wise to hold onto (some of) it for the time being.

    If the mortgage interest rate has been fixed, then I wouldn't pay off any, as you would have to pay a breakage fee which, depending on circumstances, can be very expensive.

    In relation to the mortgage protection premium, it may seem high due to the small figure, but they are also aged 60 (ie a much higher risk of dying than, say, a 25-year old). Perhaps they could shop around. I just checked on labrokers there and the minimum term is 10 years, which is obviously of no benefit. It may be the same with other brokers. Have they any other life assurance? If so, the mortgage protection is not required, so they could cancel it outright (ie would need to contact the bank and get them to sign off on it)


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