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How much will I owe on Mortgage in 10 years

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  • 06-02-2011 4:09pm
    #1
    billyhead
    Registered Users Posts: 9,849 ✭✭✭


    Folks,

    Just a quick question (I understand an exact answer could be way off) but I have a mortgae that was origionally for 20 years and amounted to 116,000 euro when I took it out in 2006. I have just invested 22000 in the 10 year long term savings account with An Post and expect a 50% return after 10 years. I also have 22000 in the credit union in a long term account which gets dividends added each year but can vary. Basically the question is I am hoping to pay off the mortgae in 10 years and was wondering if the interest rate was on average 5-6% and has been 4.5% fixed for the last 4 years but expires next year how much will be owed do you think on the mortgage after another 10 years. I have to revert to a variable mortgage next April, but I hope to pay of the rest of the mortgage in 10 years hen the long term account completes. Sorry if the above sounds confusing.


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    #2
    Kennie1
    Registered Users Posts: 302 ✭✭Kennie1


    If the question is that you want to pay off the mortgage in the next 10 years the balance should be c.€47,500 with a level interest rate of 5% or if your question is that you want to pay off your mortgage by 2016 the balance would be c.€66,500. However if you were to pay in your total savings of 44k you would have your mortgage paid off in about 8 1/2 years.

    Whilst the An post SB will return 50% over the 10 year term the lightlyhood is that mortgage rates will be higher. As for the CU rates, they are the worst on the market at the moment with many of them paying no dividents or interest at all!


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    #3
    3DataModem
    Registered Users Posts: 3,997 ✭✭✭3DataModem


    Fastest way to clear mortgage is drop in the CU lump sum as soon as the fixed rate expires, and also from that point increase the monthly payment to what you can comfortably afford.

    As Kennie says, the interest rate charged on your mortgage is always likely to be higher thsn that accruing on savings (especially CU savings) so you are better off paying any spare loot into mortgage rather than keeping in CU. Note this only applies after the fixed rate period... they'll penalise you for overpaying before this period ends.


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