I see the concept of mortgage overpayment discussed here a lot so thought I'd put in the result of a recent mortgage lump sum overpayment we did for reference.
Original mortgage: 31 years left, with 344k outstanding at 4.1%, monthly repayment 1.63k
Overpayment lump sum: €45,000
New mortgage: 24 years left, 299k remaining
Future payments saved: 1.63k monthly x seven years = 137k so a total interest saving of 92k. All tax free.
Will ultimately aim to pay it down within 15 years unless I can get on a lower rate. Then the figures above change.
If I had invested the €45,000 instead, what rate of return % would I have to achieve to hit 137k after tax after 15 years? I can't quite work it out but curious as I may do this in future vs the overpayment.
Original mortgage: 31 years left, with 344k outstanding at 4.1%, monthly repayment 1.63k
Overpayment lump sum: €45,000
New mortgage: 24 years left, 299k remaining
Future payments saved: 1.63k monthly x seven years = 137k so a total interest saving of 92k. All tax free.
Will ultimately aim to pay it down within 15 years unless I can get on a lower rate. Then the figures above change.
If I had invested the €45,000 instead, what rate of return % would I have to achieve to hit 137k after tax after 15 years? I can't quite work it out but curious as I may do this in future vs the overpayment.