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Buying - put all in to reduce repayment, or hold back?

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  • 30-06-2016 6:00pm
    #1
    whiskeyman
    Registered Users Posts: 12,564 ✭✭✭✭


    Hi folks,

    Just looking for any pointers here.
    Soon to properly bid for houses, but just wondering on tactic.
    We have a fair bit of savings, and hoped to buy a house with money left over for essentials spends, and some not so essential (around the 30k mark).

    However, should our tactic be to squeeze the repayment / drawdown amount to as low as possible with any money you have, and then save / get credit union loan for those non essential items?
    e.g - if we wanted new kitchen and windows in the short term, are we best to keep money aside for it or save / get loan afterwards?


    Any pros / cons tips etc... welcome.
    I guess looking at the cost of the mortgage interest over the lifetime really got me thinking.

    Mortgage drawdown / repayment amount 4 votes

    Keep to min as much as possible! Save / loan elsewhere for other additions
    0% 0 votes
    Keep low, but hold some money back if you can for spend afterwards
    100% 4 votes


Comments

  • Options
    #2
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    whiskeyman wrote: »
    Hi folks,

    Just looking for any pointers here.
    Soon to properly bid for houses, but just wondering on tactic.
    We have a fair bit of savings, and hoped to buy a house with money left over for essentials spends, and some not so essential (around the 30k mark).

    However, should our tactic be to squeeze the repayment / drawdown amount to as low as possible with any money you have, and then save / get credit union loan for those non essential items?
    e.g - if we wanted new kitchen and windows in the short term, are we best to keep money aside for it or save / get loan afterwards?


    Any pros / cons tips etc... welcome.
    I guess looking at the cost of the mortgage interest over the lifetime really got me thinking.
    The mortgage rate is lower than any other loan rate. You should get as high a mortgage as you can with a facility to make early part payments. You can then make part payments to shorten the term or reduce the monthly payment.


  • Options
    #3
    Turkish1
    Registered Users Posts: 273 ✭✭Turkish1


    whiskeyman wrote: »
    Hi folks,

    Just looking for any pointers here.
    Soon to properly bid for houses, but just wondering on tactic.
    We have a fair bit of savings, and hoped to buy a house with money left over for essentials spends, and some not so essential (around the 30k mark).

    However, should our tactic be to squeeze the repayment / drawdown amount to as low as possible with any money you have, and then save / get credit union loan for those non essential items?
    e.g - if we wanted new kitchen and windows in the short term, are we best to keep money aside for it or save / get loan afterwards?


    Any pros / cons tips etc... welcome.
    I guess looking at the cost of the mortgage interest over the lifetime really got me thinking.

    I would not put everything into the mortgage personally if you intend doing renovations that you would then get a loan for after moving in. Your mortgage rate will be somewhere in the 3.2%-4.2% range but you would likely pay closer to 10% for a personal loan.

    If you are going to just save for the improvements to the house, then it's a different question really. I would personally hold back some cash from the deposit and do the work at the outset rather than move in and then have the hassle of work going on around you while living there 1or 2 years down the line. You will pay slightly more on your monthly repayment but can pay this down quicker over the first couple of years if you want with the savings you would have otherwise had to build up to pay for the renovations. Slightly more expensive but worth it to not have the hassle IMO


  • Options
    #4
    Wesser
    Registered Users Posts: 1,813 ✭✭✭Wesser


    I have looked in to this too and it seems that the apr for house improvements in the credit union is 6 percent which is much higher than mortgage.

    On the other hand if I have a large deposit with a higher LTV then I am more attractive to the banks and will actually get a mortgage, and the higher your deposit for example with Kbc, the lower the apr.

    So my plan is to sit down with all the figures when I have them.... Do the maths, get the answer...


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