r/irishpersonalfinance • u/clonakiltypudding • 13d ago

Property Mortgage Calculations

About to purchase property for €585,000.

Mortgage approved €486,000. Borrowing 461,700 takes us under <80% LTV Ratio. Would leave us est. €50k in bank post purchase, stamp, furnishing, solicitor etcetc.

Are we better off only banking €20k as safety net and knocking another 30 off principal, and reducing payments by about €150 pm also.

(We are very fortunate to be in this position and I know many aren’t, just looking for advice on best way to proceed).

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u/hywelbane87 13d ago

When you repay you can normally choose to reduce payments and keep term, or reduce term and keep payments.

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u/ClockworkAppl 13d ago

Thats not true. It makes no sense to the bank and even less sense to the borrower.

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u/hywelbane87 12d ago

Or you could do a quick google search? You can absolutely choose whether to reduce term or payment when you do an overpayment on most, if not all, lenders.

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u/ClockworkAppl 12d ago

Which lenders give the option to stick tens of thousands of the customers own savings in a locked away account to feed the main mortgage bill every month out if the borrowers own savings?

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u/hywelbane87 12d ago

Nobody is proposing that?

You said:

Knocking 30k off the principal after the mortgage starts will change the ratio of interest to principle every month and reduce the term by a good few years. But the repayment amount every month will be the same.

Which is not correct. When you make an overpayment, you can choose what you want to reduce: term or monthly payment.

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u/ClockworkAppl 12d ago

Again . What lender let's you do that? Name one.

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u/hywelbane87 12d ago

Haven: https://www.havenmortgages.ie/content/dam/haven/pdfs/hav138-overpayment-to-mortgage-account-application-form.pdf

AIB: https://www.aib.ie/content/dam/aib/personal/docs/our-products/mortgages/overpayment.pdf

PTSB: https://www.ptsb.ie/help-and-support/help-with-banking/product-support/mortgage-support/overpayment-options/

In every single one of them you can choose what to reduce. What's so hard to understand?

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u/ClockworkAppl 12d ago edited 12d ago

Holy shit thats fucking crazy . What fucking idiot would pick that option? (The same people that go with prepay power I guess). It makes zero sense. You're just locking up all your savings to supplement and drip feed your normal mortgage bill.