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Your Questions: Will switching to N26 for banking affect my mortgage application?



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Q: I am about to transfer all my banking from one of the mainstream Irish banks to either the Revolut or N26 banking services, so that I can avail of free banking. My current account has just been hit with another change, and ultimately an increase in charges, and I have had enough.

I am planning on applying for a mortgage in the new year and I wonder if it will go against me that I am not technically with a bank for my day-to-day money management?

A: It is worth noting that N26 is actually a bank in the technical sense. It is regulated by the central bank in Germany, and it is also protected by the €100,000 bank deposit guarantee scheme that Irish bank customers are protected by, according to Joey Sheahan, who is head of credit at MyMortgages.ie. Revolut is not, as yet, classified as a bank. But it is going through the regulatory process, he said.

Regardless of which of these you use, Irish mortgage lenders will not see it as a negative that you no longer hold a current account in a traditional bank, Mr Sheahan said.

All they need to see is six months' banking history. This is so that they can get a clear picture of your money management style, i.e. do you pay your bills on time and in full? Are you ever in or out of an overdraft facility? Do you have an online betting account?

It is the answers to these questions, and more, that will have a real bearing on the likelihood of a successful application.

However, some banks will offer incentives to applicants to open current accounts with them. They may offer a lower interest rate, of say 0.2pc.

While there may be charges associated with the current account, the savings on the mortgage interest could outweigh the cost of the account.

It is important to consider your options and take advice from an expert before making a final decision.

Q: My father is leaving the country for the first time in 50 years (he went to the UK when he was 21) and is going to visit my sister in Australia for a month. We have been struggling to get travel insurance for him. Some companies are quoting very expensive prices, while others simply say he can't take a policy with them. Is this allowed? Surely it is ageism at its finest?

A: Unfortunately, insurance companies usually charge more when the risk increases, and when it comes to our health, the risk generally increases as we get older.

However, a number of insurance providers will quote for people aged over 70, subject to the person being in reasonable health, according to Deirdre McCarthy of Insuremyholiday.ie. Let's assume that if he is off to Australia for a few weeks, he is in good health. Most policies that offer cover will typically limit it to 31 days for any one trip from door to door.

So it would be wise to ensure that his travel plans have him back in time to stay within the 31-day period, Ms McCarthy added.

The cost of the cover will be substantially greater than the typical two weeks in Marbella for someone like you, who is probably still in their 30s or 40s.

Q: I recently changed jobs and am about to take up a new customer service position in Cork. It is the first time I've changed jobs since I moved to Ireland last year.

I heard from friends about emergency tax, and they told me I need to get my tax credits organised or I will lose a lot from my first pay cheque. How do I avoid this?

A: Emergency tax is applied by an employer where it has not received a Revenue Payroll Notification for the current year for an employee, or where it has not been provided with a PPSN (personal public service number).

If you haven't given your employer your PPS number, you will be taxed under normal emergency tax rules, according to Eileen Devereux, commercial director at Taxback.com. This means you are allowed a single person's rate band for the first four weeks of your employment. You will be taxed at the standard rate of 20pc on income up to the limit of the rate band.

Income above that rate band will be taxed at the higher rate. After four weeks, your full income will be taxed at the higher rate of 40pc.

The best way to avoid being placed on emergency tax is to give your PPSN to your new employer as soon as possible, and to ensure that your employment is registered, Ms Devereux said.

You can find your PPS number on any previous payslips, or correspondence you have from Revenue.

Banks want to see six months' banking history when you apply for a mortgage. This is so they can get a clear picture of your money management style.

Emergency tax is applied by an employer where it has not received a Revenue Payroll Notification for the current year for an employee, or not received a PPS number.

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