Friday 22 September 2017

Savings could be a lot more

A family has a €300,000 mortgage. The interest rate on the 25-year home loan is 3pc -- with monthly repayments coming in at around €1,400.

If this family can't meet the repayments then the mortgage could be split. Half the capital it put to one side. Only the interest payments would be repaid on this €150,000 -- amounting to around €375 per month.

The other half of the mortgage would need full repayment -- both the interest and the capital -- costing around €700 every month.

The total monthly repayments would now be around €1,075 -- some €325 lower than previously.

However, if no interest was applied to the parked part of the mortgage the monthly repayments would be even lower at around €700.

Irish Independent

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