Avoiding personal debt

16 September 2008
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Short term debt can have major implications on cash flow.

A 250,000 mortgage over 35 years will cost approximately €1340 per month at a mortgage rate of 5.5%

A €10,000 loan over three years at 8.5% will cost €315 per month.

The short term loan repayments account for almost 25% of the mortgage payments in the above scenario.

It is important therefore to plan carefully for any debt repayments and to avoid borrowing if at all possible .

The above example also illustrates the importance of saving both before and after your house purchase