‘I haven’t made a bad investment – when in doubt I seek advice’

Do you have Covid money problems? You can help solve them by reviewing your mortgage even during the lockdown – in fact banks are actively adding incentives to do so. You could save around €182 a month on a €300k mortgage and take some financial pressure off.

You could even save a packet just by switching loans with the same lender. And there is always the added bonus of teaching a lesson to banks, who were recently exposed (again) for ripping us off. That makes it a very lucrative use of your time stuck indoors, says Rachel McGovern of Brokers Ireland, who tells us exactly how to do it – along with a few other financially savvy things.

How much extra are banks charging Irish mortgage holders compared to the rest of the EU?

Irish mortgage holders are paying 1.56% more than their euro area counterparts, costing them over €236 more every month on a €300k mortgage over 30 years and a massive €85,100 over the lifetime of the mortgage.

Why is this?

Lenders say it’s harder gaining repossession here in the event of mortgage default and there is a requirement to hold higher capital levels arising from the last financial crash. However, the Central Bank in a report last year said:

‘The Irish retail banks’ funding costs have continued to fall. Banks can fund themselves more cheaply than international peers, largely due to a strong supply of customer deposits.’

So maybe they do have a bit of leeway to give us a well-deserved break… and will do so some day (when porcine flight is a reality). In the meantime, what can we do to get a better deal?

Consider switching, provided you’re not on a tracker mortgage. There are substantial savings to be gained. A financial broker can provide advice and support in switching to a new mortgage provider, or getting a better rate from the existing one.

How much could they save?

With a €300k property and an outstanding mortgage of €250k with say 20 years to go and a current rate of 3.75pc, you could get a rate of 2.30pc and save up to €182 per month.

Can we switch during the Covid-19 crisis?

Yes. Many lenders are now incentivising switching and remortgaging, with cash back on drawdown, or money towards legal fees. Pre-offer conditions may be added in terms of income clarification and every mortgage application is subject to income sustainability review.

Are banks shying away from granting loan approvals for switching, in particular?

No, they are incentivising it.

How can we switch?

Collate your salary slips and bank statements. Make sure you have an up-to-date mortgage statement with the redemption figure and a rough idea of your property value. No need to get a formal valuation, lenders will carry out their own. Contact your Financial Broker.

What did your parents teach you about money?

Put some pennies away for a rainy day.

Your best investment?

My best has been my home. When buying property, you need to plan for the long-term so that you don’t lose out on market ups and downs.

I know people who’ve bought in the hope of turning it over and making a quick return but as we’re seeing in the pandemic, there are no guarantees and if you think longterm about investments you will fare better.

And the worst?

I haven’t to date had a bad investment. I put that down to being involved in the financial sector and when in doubt seeking advice.

Have you ever been scammed?

Thankfully no. I think it’s very important to know your rights as a consumer. The Competition and Consumer Protection Commission has lots of information on this.

Most expensive thing you have bought for fun.

A trip to Bali, I love travelling to new places. I’m looking forward to being able to travel to some new destinations in the future.

What three things would you do as finance minister.

Allow people to defer cashing in their Approved Retirement Funds (ARFs) as they mature in 2020; remove the 4pc limit on withdrawals for 2020 from Approved Minimum Retirement Fund; and remove the 1pc Life Assurance Premium Levy.