The average household can offset some of the financial impacts of COVID-19 by making a number of small changes to the way they run their house, according to a mortgage expert.
Martina Hennessy, doddl Managing Director says that looking at the big-ticket items such as mortgage switching, claiming tax rebates and changing utility providers will provide the average household with a substantial sum.
“Spending lockdown time looking at bigger items can substantially improve household finances,” she says.
“Switching your mortgage is the one change a household can make that will have the largest impact on your finances. The lowest rate on the market is 2.2%, yet there are still over 220,000 households paying standard variable rates of up to 4.5%.
“Switching from 4.5% to 2.2% will result in a saving of €127 per month for every €100,000 outstanding over a 30-year term."
Martina has noticed an uplift in volumes of applications from people in recent weeks as they look to make substantial savings in a precarious time.
"On a mortgage of €300,000, the annual saving will be €4,572. Taking a five-year fixed rate at 2.2% will save €22,860 over that period. As a rule of thumb, anyone who purchased property after 2008 should review their mortgage regularly.
“Annual mortgage statements for 2019 have all the information you need on what you are paying, and with the time that many mortgage holders now have, an investment of hours can pay massive dividends.
“Many mortgage holders at this time are also looking to take an equity release as they have decided to retain and improve their properties as opposed to moving house. By reducing interest rate this can often mean they borrow a higher amount but repay the same amount or lower due to the lower interest rates available on market.
“It is also worth noting that lenders offer cashback amounts of up to 2% at drawdown, so on a €300,000 mortgage there can be cashback of up to €6,000.”
Martina said applying for tax refunds is another wise use of time, with relief available for those now working from home.
“Too many people miss out on claiming their entitlements, believing it either too complicated or not worth their while, but the average refund for a Taxback.com customer is €1,076," she says.
“You can claim tax relief on the expenses you incur if you are now working from home. There are also reliefs available for medical and non-routine dental costs, couples in the first year of marriage and for flat-rate expenses, such as €153 for electricians and €518 for teachers.
“The Commission for Energy Regulation estimates that dual gas and electricity customers who switch supplier each year save an average of over €400 per annum. Choosy.ie, One Big Switch and Switcher.ie allow customers find better deals than their existing tariffs."
For more information on how to claim tax back while working from home, click here.
Main image by @matildadjerf