Q I have a tracker mortgage, so my mortgage bills have gone up twice since last July as a result of two interest rate hikes by the European Central Bank. The interest rate on my tracker mortgage was 1.5% before the ECB started raising its rate in July. Now it’s almost double at 2.75 pc. Tracker mortgages have always been considered gold dust, but now I’m considering fixing my mortgage because I’m worried the ECB could raise their rates again in the coming months, which would push my mortgage bills even higher. Would it be a good idea to give up my tracker and fix my mortgage?
A Tracker’s mortgage rates are among the first to rise when the ECB raises its rates. They are also the first to fall when rates are cut, according to Joey Sheahan, director of credit at mymortgages.ie.
Although some lenders recently increased their lock-in rates, it’s still possible to lock your mortgage at a rate that’s lower than your current 2.75pc tracking rate. There are still four and five year fixed rates around the 2pc or 2.25pc mark.
Opting for a fixed rate now would certainly protect you from any further interest rate increases.
Opting for a fixed rate now would certainly protect you from any further interest rate increases, and it looks like more rate hikes are on the cards.
Fixing your mortgage may not be a good idea if you plan to move soon, as you may face a penalty if you pay your mortgage early due to a move. However, some lenders are more forgiving of this than others.
If you keep your rate on track, it will drop when interest rates start to drop. However, no one knows when rates will begin to fall, or for how long rates will rise, Sheahan said.
Q I am self-employed and preparing for my next tax return. I just found some extra income from 2020 that I didn’t file last year by mistake. Am I better off contacting Revenue directly about this or do I just include it in my 2022 submission? Am I subject to a fine?
A If you discover you’ve made a mistake on your self-assessment, you should contact your local revenue office right away to explain the mistake and how it happened, according to Taxback.com consumer tax manager Marian Ryan.
In this case, the due date for the 2020 tax return was October 31, 2021, so you have time to self-correct. Taxpayers can avail themselves of self-correction without penalty provided that certain conditions are met.
The taxpayer must notify Revenue within 12 months of the filing due date of the adjustments being made, provide an estimate of the correct tax and statutory interest payable, and payment, in full, must accompany the filing of the amended return, Ms. Ryan said.
Filing an amended return on STRs does not constitute a notification to the Treasury
It should be noted that the filing of an amended STR return does not constitute a notification to the Treasury, since a written notification is required. This could also be done via ROS. After the self-correction deadlines have elapsed, the taxpayer can still benefit from the benefits associated with a spontaneous qualified disclosure.
Unsolicited rating disclosure is considered a rating disclosure before Revenue has issued an intervention notice. With full cooperation provided by the taxpayer, the minimum penalty is 3% for cases of reckless behavior and 20% without full cooperation.
In both cases the legal interest will be applied.
Q We are a family of two adults and two small children in the VHI First Care 150 Day-to-Day plan. Is this a good cover?
A This is still a good value semi-private plan costing €965 per adult and €192 per child, according to broker Dermot Goode of TotalHealthCover.ie.
If he’s satisfied with the coverage, Goode said he wouldn’t recommend any changes. However, there is no high-tech cardiac coverage in this plan and for certain private hospitals, the coverage in the plan is only 75%.
If you are interested in expanding your coverage, he recommends you consider the corporate plan VHI Company Plan Plus Level 1.3, which costs €1,245 per adult and €319 per child.
This is a more comprehensive scheme that includes full high-tech cardiac coverage, full semi-private coverage in all standard private hospitals subject to the policy deductible, and increased reimbursement for outpatient expenses.
You can also split your coverage, meaning you can upgrade adult-only benefits and keep kids on the same plan if they want, Goode said.