Q In 2002 my wife, then single and in England, took out a mortgage of €87,000 for a term of 20 years with Irish Life on a small holiday home in the southeast. We moved to Dublin (where I was sole owner with no mortgage) and married in 2004. The interest rate on the southeast property mortgage was set at 5.49 per cent and was supposed to be fixed for two years.
The money goes out via my wife's account, amounting to about €530 per month. Irish Life would only have had the address itself or that of her parents to write to but there's been no yearly mortgage statement or change in payments since it was set up.
I don't know if we've gained or lost on the fixed rate as opposed to the variable over the four years since the rate was supposed to end. I'm not inclined to ask the institution to update matters in "the current climate".
However, when we or they eventually do this, can they request that we pay any amount gained by us from the extra time at the fixed rate or can we claim from them if we would have paid less on the variable rate?
P O'C, e-mail
ARegardless of the current situation, I think your wife, or both of you, should contact the lender as soon as possible to find out the position with your mortgage. By the way, I assume it is Permanent TSB and not Irish Life, as the latter is the life insurance side of Irish Life Permanent and not a mortgage provider.
Your wife's mortgage contract will indicate what happens at the end of the fixed term period, in the absence of other instructions.
What I don't quite understand is that the payments from your wife's account have never changed. Once the initial two-year fixed rate she was on expired, and depending on the terms of the contract, the lender would have a couple of options. They could have moved your wife to another fixed rate or, more likely, to a standard variable rate - or, at a stretch, a tracker mortgage. Regardless of which move was made, it is almost impossible that the monthly repayments would have remained identical.
As it happens, rates were falling at that time and she should have noticed a smaller sum coming out of her account. There has also been quite a bit of activity in rates in the recent past, which should have been evident in the transfers from your wife's account. It is also unthinkable that the lender would not have tried to contact the customer as the end of the fixed-rate period approached. The fact that she has received no annual mortgage statement also concerns me. It all points to the lender mailing the information to an address other than the property itself or your wife's parents.
On your concern that the lender might demand repayment of outstanding amounts should you contact them, this is not an issue. As I have said, the lender will have moved your wife to another rate - laid down in the mortgage contract - when her fixed term ended. Similarly, your wife will not be in a position to demand repayment for any perceived overcharge - unless the lender acted against the terms of the contract. The fact that no attempt has been made to contact the lender for almost five years would inevitably weaken your case.
MEDICAL CARDS AND SAVINGS
QIn your piece last Friday on the medical card question, there may be a possibly significant point which you did not highlight. It is my understanding that interest earned on savings and investments from the first €36,000 of savings for a single person, and €72,000 for a couple, is not taken into account in the means test for medical card eligibility. I do hope this information is correct.
EM, e-mail
A It is indeed correct and of significance to last week's correspondent - whose income was well within the threshold and whose savings amount to €87,000.
The means test rules state that individuals over 70 can earn €700 a week gross or €36,500 a year without losing eligibility on a medical card. For couples, the figures double to €1,400 gross (before tax and PRSI etc) or €73,000 for a couple.
The figure includes "actual" income from savings. However, as you say, the first €36,000 of savings for a single person and €72,000 for a couple are discounted. So our correspondent need only look at the income yield on €15,000 of their accumulated savings.
Please send queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2. or by e-mail to dcoyle@irish-times.ie. This column is a reader service and is not intended to replace professional advice.
