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Published on: Mortgage Insights

SAVING TIPS

You could save €5k by doing two simple things – and Irish working from home could pocket even more

Article: www.thesun.ie

IRISH households could save up to €5,000 by doing two simple things, a mortgage switching expert as revealed.

Doddl Managing Director, Martina Hennessy has outlined two key steps for homeowners to take in 2022 to combat rising bills and living expenses and save mega bucks.

Doddl Managing Director, Martina Hennessy
Doddl Managing Director, Martina Hennessy

Ms Hennessy has advised that homeowners review their home loans and claim tax refunds in 2022.

She told how doing both of these things could result in the average Irish household saving €5,000 – 50 times the planned €100 State subsidy to help families with increasing energy bills.

Ms Hennessy said: “Spending time in the short term reviewing some big-ticket outgoings can pay massive dividends long term.

“Householders have been hit hard by rising utility costs and the general cost of living.

“However, switching your mortgage and claiming allowable tax expenses are two things a household can easily do to soften the blow.”

Ms Hennessy also noted Doddl’s most recent mortage switching index which showed that homeowners are needlessly handing over up to €4,258 in extra mortgage repayments per year by not switching lenders.

She said: “The spread between the highest and lowest interest rates available on the market has now grown to 2.55 per cent, meaning a saving of up to €135 per month for every €100,000 owed on a 25-year mortgage for those who switch.”

Latest data from the Central Statistics Office shows residential property prices increased by 13.5 per cent nationally in the year to October 2021.This compares to an increase of 12.5 per cent in the year to September and a decrease of 0.5 per cent in the twelve months to October 2020.

Ms Hennessy continued: “While this is a harsh reality for those looking to purchase a property, it does mean that there is an opportunity for existing homeowners to revisit their mortgage balance relative to their value and unlock lower rates as lenders tier their rates by loan to value.

“With fixed rates as low as 1.95 per cent, now could be a good time to fix and lock in mortgage repayments for a set amount as the cost of living in general increases.”

WORKING FROM HOME RELIEF

The mortgage switching expert told how those working from home could pocket even more, with available tax relief on household expenses.

She said: “When people take the time to claim their entitlements, the average refund for a customer is €1,076 according to Taxback.com.

“With thousands of Irish employees now working remotely you could be eligible to claim tax relief on the expenses you incur while working from home such as heating, electricity and broadband.

“Reliefs are also available for various medical and dental costs, couples in the first year of marriage and for flat-rate expenses depending on your profession.”

SAVING BOOM

Meanwhile, a new survey has found that saving money in 2022 is the top priority for four in 10 people.

Three in 10 said their financial behaviour has worsened since the beginning of the pandemic while a similar number improved their spending habits.

According to the latest Taxback.com Taxpayer Sentiment Survey of over 1,200 taxpayers, 20 per cent said they would budget properly in 2022.

Just 11 per cent of people said they plan to be more proactive in terms of looking for better deals on insurance and in getting their tax back.

Speaking of the findings, Barry Cahill, Business Development Director at Taxback.com, said: “The feedback was really mixed – because while 71 per cent of people said that they had made changes to their financial behaviours since the pandemic began – there was a split between those who are now better at money management and those who are worse.

“What’s more, while saving appears to be a high priority for lots of people (44 per cent) in the new year, it’s a bit disheartening to learn that just one in 10 appear to want to be proactive when it comes to negotiating or sourcing better deals or claiming back money.

“Unnecessarily overspending and not claiming what people are owed have always been something the Irish consumer has grappled with.

“Many people are simply unaware of the significant price differences on various products, or about tax relief or other benefits that they are entitled to avail of. Which is why it is up to the experts to highlight the many ways which people can cut their costs and save money without having to sacrifice.”

NEW FOCUS

The Taxback.com survey also found that 11 per cent are focused on earning more money as a result of the pandemic.

Mr Cahill continued: “This is an interesting result in that it is so low. Perhaps, owing to the pandemic, more people are more focused on maintaining a better work life balance than they were before – perhaps it’s increasingly a case of ‘your health is your wealth’.

“However, while money certainly isn’t everything, the cost of goods and services is increasing at an alarming rate as inflation bites, so more people should be looking at their take home pay. If it hasn’t changed in a few years, then it’s likely that their standard of living is going backwards.

“While many households have faced a real possibility that Covid-19 and the resulting economic havoc might leave them unable to pay their mortgages or deal with other major expenses, the amount that people have saved has boomed.”

doddl.ie