Q My wife and I just paid off our 15-year mortgage last year. The bank estimated the total cost of the credit at the start at €93,902.60 (based on 60 payments fixed at 4.45pc and 120 payments variable at 3.6pc). But the bank deducted €101,698.43 in interest charges. This is €7,796.23 of an overcharge. Because of uncertainty with the rates we chose to fix for two subsequent periods of 60 payments and 60 payments after the initial fixed period but we feel cheated at paying the overcharge as most banks have reduced rates over the years. We feel the bank should repay this extra amount back to us but of course they quote the terms and conditions. Is there any recourse we can take?
A I can hear your frustration and annoyance with what looks like both a high interest rate and over-charging, but I'm afraid I disagree with your use of the term "overcharge".
Banks have most certainly been guilty of over-charging certain tracker customers and others over the years, scandalously, and for which they are paying dearly. However, an estimate of the cost of credit is neither a guarantee nor a contract, despite you latterly fixing the rate a second time.
Joey Sheahan, head of credit with MyMortgages.ie says: "The total interest quoted in your loan offer 15 years ago would be an estimate of interest to be charged. While the interest rate was fixed for the first five years, the interest rate thereafter (ie, for the final 10 years) then reverted to a variable interest rate, which would be affected by the cost of funds available to the bank during the final 10 years of the loan at the time.
"This variable interest rate will vary upwards or downwards. Even though you fixed, and paid €7,796.23 more interest than you expected, it is just as likely that you could have paid less also over the term of the mortgage. The two subsequent fixed-rate terms may also have had a higher interest rate than the 3.6pc projected variable interest rate.
"The loan offer or the terms and conditions accompanying your loan offer, which would have been provided to you 15 years ago and which you would have agreed to before you took out the mortgage, would have outlined all the variables."
It's no comfort I'm sure, but paying off your mortgage, freeing up money every month and having a home to call your own in every sense of the word, is a super achievement, so well done.
Q I'm confused about how to claim tax relief on my mum's nursing home bill. She is under the Fair Deal scheme since last November but while her fees are covered, the home charges me an extra €90 per month for activities like bingo and crafts (most of which she is unable to access), and a further €35 for someone who comes in and does beauty treatments with the residents, which she likes. The issue is now that it's not covered by her remaining pension and I have to pay this, which I don't mind, but when I rang Revenue they told me I couldn't get tax relief. The nursing home told me I can on all fees. Who is right?
A Both are - but there is some clarity needed about the word 'fees'. Fair Deal generally covers the cost of bed and board, along with nursing, personal care and laundry over whatever the resident's contribution is. Any portion you pay yourself, over and above Fair Deal, qualifies for tax relief at your marginal rate (20pc or 40pc) under 'Nursing Home Expenses' relief.
Tax relief at the Standard Rate (20pc) is given on additional medical expenses, which include things like hearing aids, appliances, special foods and other medicines, treatments etc, on the Med 1 form which anyone can apply under.
The difficulty is whether 'beauty treatments' or charges for non-medical activities qualify for any relief. My inclination is that it doesn't and I've had a look at the fairly exhaustive list on Revenue's website, which limits the higher relief to 'maintenance or treatment expenses or diagnostic procedures incurred with the services of a practitioner' and the Med1 reliefs to specific items mentioned above and a raft of others, which you can review.
Well, who woulda thunk it? When Nama was set up, most of us hadn't even heard the concept of a 'bad bank'. Then there came a time when every bank seemed bad, and now most of them are back doing what banks do, for the most part, well.
Nama was universally disliked and distrusted - by taxpayers who funded the very generous haircuts on loans; by politicians who saw it as a necessary evil and one which was imposed on them; and by developers furious because they ended up in it whether they wanted to or not.
In fact, it seemed for many years that the only people happy with it were the bondholders - those riskiest of risk takers who instead of having their fingers burnt ended up getting them wrapped in kid gloves.
Now Nama will report a €4 billion surplus as it comes to the end of its natural life. To be sure, much of this is down to rising tides, lifting boats and markets, as much as its management team. But sometimes it takes a little hindsight and distance to recognise good effort, however imperfect its origins.