Mortgages can be trickier once you pass the age of 40
Q I read this week that the over-40s are being denied mortgages. I am 43. Does this apply to me? A The over-40s are not being denied mortgages. But they may not qualify for the longer-term loans currently on offer for younger buyers. The term of a home loan is usually not allowed to run past a certain age, usually retirement age. However, different banks have different rules.
In your case you should still be able to get a 27-year loan with Bank of Ireland, Ulster Bank and Permanent TSB. KBC will lend on a mortgage term up to a maximum age of 68, so you could get a 25-year mortgage. AIB and EBS allow a 22-year term up to your 66th birthday. But they may extend this if you are selfemployed or can provide documentary evidence that you retire later. However, if you retire earlier than 65, this may shorten the mortgage term.
A shorter term loan will have higher monthly repayments than a loan taken out over several decades. This may even rule out some middle-aged people if they are seen as unable to meet these higher payments. On a positive note, you would save a lot of interest. Q KBC has a credit card with a new rewards scheme, which pays back 1% of the value of your purchases. Is it possible to make a profit? And how does it compare with other cards?
A It sounds like a good deal, as long as you clear the balance every month. If you rack up debt on the card, you’ll end up earning 1% – but paying 18.25% APR! That’s KBC’s interest rate, which is the fourth cheapest in the market. However, it will cost you dearly if you don’t control your spending.
Also be aware that the ‘reward’ applies to grocery and online purchases and is capped at €10 a month and €120 a year (i.e. €12,000 worth of purchases). In theory, you could make a €90 profit if you pay just the €30 government charge and no interest for a year (€120 less the €30 government charge).
In comparison, AIB’s Platinum card offers a ‘reward’ of 0.5% of total purchases between €5,000 and €50,000. So it pays half of what KBC offers and you don’t get anything until you start spending more than five grand a year. You’d have to spend €29,000 in a year to match KBC’s maximum payout of €120. If you splash out the €50,000 limit, you’d earn €225. But someone who blows that kind of money on a credit card is hardly going to get excited about saving a couple of hundred euro.
Tesco has a credit card that gives you points on its Clubcard scheme when you use it (even in non-Tesco stores). With this, you are effectively getting 0.5% of your purchases back in extra points.
Tesco also offers 0% interest on balance transfers for six months and 0% on new purchases for eight months. This isn’t a bad deal for a keen Christmas shopper.
Overall, in terms of rewards, KBC trumps AIB and Tesco if you spend up to €12,000 a year on your card. However, Tesco’s card has no reward points limit and this could work out better for big spenders. Due to an error in the editing process, last week’s Q&A exaggerated the level of tax refund on charitable donations. The figure given was 41% when in fact it is 31%. For example, here’s how a €1,000 donation would be treated: Donation €1,000 Plus tax refund @31% €449.27
Total benefit to charity: €1,449.27