Monday 23 September 2019

Home Economics: Our property finance expert answers your questions


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Sinead Ryan

Sinead Ryan

Question: My father is in his late 80s and gets around independently with a walker. He does not need a nursing home and would refuse one in any event. What he does need is someone around most of the time as he is in danger of falling and he can't even do light housework so things are piling up, but we have found the private care agencies very expensive. At €25 an hour he simply cannot afford them and he was refused a Home Care Package. We considered a student under the rent-a-room scheme but I was worried they would be coming and going. I live 50km away and can't be there all the time. Is there any other option before I have to look at a nursing home, or sell his house and move him in with me - which neither of us wants.

A Elder care is very expensive in any form. Private agencies are pricey, but you do get full tax relief (unfortunately pensioners rarely can, because they don't earn enough to be in the tax net) but if you are working and pay the bill, you can qualify for relief at your marginal rate.

One option set up to help alleviate the housing crisis may however, be an alternative. It's called Home Share and matches people who need accommodation with elderly people who need companionship care. In exchange for a place to live, mature adults provide light housework, errands and companionship. They are not qualified carers so will not manage medication or lifting duties etc, but it might be the solution, for now. The organisation says it's important the home owner "has the temperament and current level of health to benefit from a home share companion being in the home". See for more details.

Another organisation with similar services is Granny Au-Pair (the 'granny' refers to the au-pair not the home-owner!) - it is German-based but has quite a number of mature home-sharers in Ireland. Women who are over 50 and largely from Germany, Austria and Switzerland travel to Ireland to offer care in exchange for living in another country. See Reapply for the Home Care Package. Rope in your father's district nurse and GP to the application, and mention in particular his risk of falling. First thing 2019 is the time to go for it.

Q We are in the process of getting our first mortgage. So far the bank has been very accommodating and we have given it everything it has asked for. However, it has given us a quote for 'mortgage protection' life insurance which is coming in at €46 per month. We have found a cheaper quote but the bank says it's not an acceptable insurance policy. Can the bank do this and what is the problem?

A No the bank can't. It's called 'conditional lending' and is not allowed. It obviously hasn't stopped it from trying and you'd do well to challenge it. Without knowing your personal details I can't tell whether the premium quoted is the best one for you, but many insurance companies price-match to the lowest quote anyway.

A survey by iReach some time back found that half of mortgage holders felt they had been pressured into taking out mortgage protection through their bank instead of an independent broker. A high 74pc of mortgage borrowers ended up taking it anyway. In many cases, they're over-paying.

If you have found a product which does the job - namely pay off the residual mortgage should either one of you die before the term ends - and it costs less, there is absolutely no problem with you buying that one instead. It may be the case that your bank is offering what it sees as a better product, perhaps one with additional life cover or serious illness benefits, and this may carry higher premium. But the minimum requirement is a life policy which decreases in line with the mortgage balance outstanding and this is called Decreasing Term Assurance. Offer your cheaper quote and ask the bank specifically to outline what is wrong with it - and then go with it.


The Ryan Review

The most important banking news this month is no news at all.

Both the European Central Bank and the Bank of England left their key interest rates unchanged. Both organisations have one job: to keep inflation at 2pc.

Both have failed pretty miserably at it. The British have been flip-flopping above and below the target while the ECB probably can't remember the last time it met it.

Monetary policy is a powerful tool. It controls supply and demand in an economy and the UK's governor Mark Carney startled markets when he said the BoEs response to a hard Brexit would not necessarily result in a drop in interest rates - they're currently at 0.75pc. He needs to weigh up the impact first, he says, but that's a little like knowing there's an almighty tornado coming and pondering if your washing will get blown off the line before you decide to take it in.

Over at the ECB, Mario Draghi is eyeing Ireland as a fiscal outlier - so what's new? Our storming growth and buoyant economy is at odds with Italy, Spain and other big players. So the promise of an interest rate hike for mortgage holders here (already paying the highest in the EU), looks some way off.

We'll take what good news we can get.

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