Q. I received an inheritance of € 89,000 from my late mother’s will. It is all tax free and I have an outstanding mortgage of € 284,000 on a tracker rate. With income of over € 88K between the two of us, we can afford the mortgage despite two young children aged 7 and 9. I am getting confusing advice as to whether I should pay this off with my inheritance or keep it and invest it elsewhere. Deposit rates are hardly an incentive. What does JLo think ? Tracker rates are starting to come down.. Thanks Jimmy – Letterkenny
A. Tracker mortgages were the modern day manna Jimmy – the last couple of years have been painful while more competitive fixed rates were available ! I would check with your lender and see what fixed rates are available then check with an adviser if there are more competitive fixed rates elsewhere. Then complete your monthly budget – how much is it costing you as a family to live each month ? Your home loan is generally the cheapest long term money you can borrow. With two young children you have hefty expenditure in the coming years ( putting one child through 3rd level alone will set you back € 42K ! ) so firstly you would need at least € 20K in a Rainy Day Fund ( RDF ) for those emergencies, sudden loss of income or investment opportunities. Deposit interest rates are negligible currently – 0.75% being the best demand rate ( An Post Money ). Best return of any asset class over any period of time is the stock market and you could find a managed fund to suit your risk category that might yield a better return than that available on deposit. You could also invest in a regular stock market saver account – minimum € 100 per month… ideal if you can save your monthly € 280 Child Benefit. Take professional independent advice or email me for a fact sheet on options