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Existing Loan vs Future Mortgage vs Savings

  • 04-08-2021 10:21pm
    #1
    Degag
    Registered Users, Registered Users 2 Posts: 9,973 ✭✭✭


    Hi everyone, looking for some advice (or just general thoughts) if at all possible.

    I am currently paying off a loan at x per month. There is currently 20x left on the loan (excluding interest) so roughly two years.

    I am also saving 5x every month towards a mortgage. I currently have about 120x saved and would consider myself close to having enough saved for said mortgage.

    During Covid i was saving a bit more than usual due to decreased cost of living (less entertainment costs). This is changing now and it's becoming a tad more challenging to keep saving the 5x towards the mortgage.

    So i guess my question is, should i consider paying off the loan with monies from my mortgage account? I could then keep paying at the same rate into this account but have the loan money as disposable income. I could also benefit from not having to pay the remaining interest or could there be potential penalties from the bank for paying it off early? Could taking money out of the mortgage account for this purpose "look bad?"

    Any opinions welcomed😊



Comments

  • #2
    bigmac3
    Registered Users Posts: 88 ✭✭bigmac3


    X = ?



  • #3
    Degag
    Registered Users, Registered Users 2 Posts: 9,973 ✭✭✭Degag


    https://www.boards.ie/discussion/comment/117707557#Comment_117707557

    I didn't think it should matter but 300.



  • #4
    Buddy Bubs
    Registered Users, Registered Users 2 Posts: 3,927 ✭✭✭Buddy Bubs


    So, 36000 saved, 6000 loan paying back 300 a month and saving 1500......depending on your time frame clear the loan straight away and you are back to 36000 in 4 months. The loan will count against you in some shape or form if you went for mortgage, maybe not too much but some. Plus some cost savings on interest.



  • #5
    Degag
    Registered Users, Registered Users 2 Posts: 9,973 ✭✭✭Degag


    https://www.boards.ie/discussion/comment/117707655#Comment_117707655

    Roughly yeah. Although the alternative way to look at it is i could have 42000 in 4 months if i didn't pay back the loan.

    I think i might make enquiries with the bank anyway - to see if there would be any penalties for doing so.



  • #6
    Buddy Bubs
    Registered Users, Registered Users 2 Posts: 3,927 ✭✭✭Buddy Bubs


    It's net worth though really you should concentrate on. You'd have 42000 less 6000...depends on your viewpoint and you could still get mortgage with small loan outstanding. I wouldn't keep any loan in your situation, interest is an expense you may not need



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