With Revenue set to receive the names of over 9,000 AirBnB ‘hosts’ we looked at the implications of this as well as other ways to make your house pay for itself. The obvious one is the tax free €12,000 ‘rent a room’ scheme, but it doesn’t stop there! Find out more as Karl Deeter and Jill Kerby ‘Talk Money’.
On the 10th of August we looked at the ‘financial milestones’ you should have reached by the time you are in your 30’s.
As with many things, these are not ‘set in stone’ but in general, they are good indicators of how you are doing on your road to financial health.
Last week on Drivetime’s ‘Talking Money’ we discussed the idea of ‘downsizing’ your home and what it means, how to do it, and the things you might want to watch out for if you are considering downsizing.
As people age larger homes often become less of a requirement, equally, selling your primary home being capital gains free can be advantageous, so we looked at the angles and figured out what you should watch for.
The Central Bank rules on curtailing mortgage lending have had an interesting effect, first is that we are seeing more loans draw down that might not have because people are bringing forward consumption due to the fact they won’t qualify for the same amount again in the future. This is literally the opposite of the intended effect.
Second is that it’s causing chaos for prospective buyers who may hold an exemption or need an exemption because there are quarterly reporting rules that mean banks can’t offer a new loan until they know if an old one will be drawn or become an NTU (not taken up).
Perhaps the easiest thing to do is explain it, currently you can’t get an exemption from Ulsterbank or AIB/EBS/Haven or BOI, but you can from PTsb and KBC. The banks that can’t give you one (and remember it’s only one of LTV or LTI not both) are hogtied because they have given the limit of exemptions (c. 15%-20% of lending) already in loan offers and they have to estimate both the annual and quarterly …
When it comes to fixed mortgage rates in Ireland there is a little confusion, the first being about ‘whether to fix or not’ and secondly, if by doing so will you lose out should Irish lenders choose to lower their mortgage rates.
The simple answer is that if you fix your mortgage you may win or lose depending on what rates do, but that is missing the point of why you fix to begin with. It provides you with certainty of payments and often there is a premium due because of this, in simple terms, you pay a bit more for the ‘fixed’ assurance.
Below is a list of some of the best fixed rates in Ireland as well as who offers them.
Best 3yr fixed rate: 3.6% offered by PTsb and Bank of Ireland
(note: you can get better again by going with KBC and opening an account which gets you 3.55%)
Best 5yr fixed rate: 3.8% offered by Ulsterbank, BOI and Haven/AIB
These are ‘tiered variable rates’ meanining you have to have a low loan to value or …
This is a really common question, people are still unsure about how much they have to have in order to get a loan. While it is simple enough in terms of the rules, what is tricky is that keeping track on exceptions becomes difficult in a ‘live mortgage loan’ situation because some may draw down and others don’t.
This week on RTE’s ‘Talking Money’ we looked at the cost of raising a child. Everybody who ever had kids knows it’s expensive, but did they realise it can cost about €105,000 per child? That’s a real eye opener and that so many parents cut back on vital financial needs like life insurance to allow for general consumption is a concern. As always, you’re bound to be entertained as Karl Deeter and Jill Kerby ‘talk money’.
We were asked for a comment on the Central Bank switching report by RTE News at 6. We believe it is telling us what many already intuitively know, that by being assertive and moving away from lenders who charge more that people will ultimately save money.
There is a counterbalancing argument about the savings being estimated over the life of the loan, but equally, the report doesn’t factor in switching contributions which could sway it back in favour of moving from expensive providers to lower cost lenders.
The ‘loan to value’ ratio is a key concept in mortgage lending, it is also extremely simple which makes the concept very easy to understand and calculate. What is a little more complex is ‘why’ it matters and what the view of a lender is when it come to the risk associated with the loan to value. This video is just over a minute long and explains what you need to know.
Back in June (sorry for the delay, we had the recording but didn’t post it!) we did a piece on life insurance and both how and why it matters.
As usual, Jill and Karl didn’t always agree on everything but the need to insure against your greatest risk was universally accepted and how to do it sensibly is really straight forward.
You can catch us again ‘Talking Money’ every Monday on RTE Drivetime at about 18:15.