Dear Deeter: your finance questions answered

Dear Deeter,

I haven’t done anything wrong, in fact, I’ve done something right (just this once!)… I didn’t crash my car or have any claim against my insurance and yet the price this year has gone up? What have I done wrong? Why is my insurance getting more expensive?

Sincerely,

Curious in Tipperary,

—–

Dear CinT

(that acronym is for ‘Curious in Tipperary’, not the other word it may look like)

The simple fact is nothing ‘wrong’ has occurred from a personal point of view, you didn’t ‘do’ anything, rather (no joke) it was actually the rest of the world who made the error…. O.k. it’s not that simple, but it ain’t far off either.

The way insurance companies make money is by taking premiums from you, a certain amount goes for ‘re-insurance’ where they pass on some risk to another company, in essence the insurance company takes out insurance – in the last year there have been more claims as burglaries increase with the recession, there has been some freakishly bad weather with floods, freezes and snowfall all wreaking …

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Best Mortgage Rates February 2010

There is increased coverage of mortgages in the press of late in particular in the area of fixing or staying on a variable, below are the best rates available on the market by class of product.

Best Variable Rate with an LTV Restriction:   2.25% Best Variable Rate with no LTV Restriction:   2.55% Best 1yr Fixed Rate:   2.35% Best 2yr Fixed Rate:   2.65% Best 3yr Fixed Rate:   3.15% Best 5yr Fixed Rate:   3.7% Best 10yr Fixed Rate:  4.5%

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Mortgage Rates

Mortgage rates are normally described as a percentage, be it 5% or 3.98% the important thing to remember is that it merely interprets the cost of that credit to you as a financial debtor to the provider. When you compare rates it is also important to have an understanding of where they came from.

For instance, which rate is better an ECB (European Central Bank) tracker of 5% or a standard variable of 5%? They are both the same numerically but the tracker has a guaranteed margin the SVR (standard variable rate) does not so if the ECB change rates, for instance the way they cut rates in mid-October the standard variable might not come down the full 0.5%.

To be fair most banks have decided to pass on the ‘full’ rate cut, but what they had done in the interim of rate movements was to increase the margin on their SVR’s when the ECB was actually standing still between June of 07′ and …

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