Will renting wreck my tracker?

PERSONAL FINANCE:Your queries answered

Q

My daughter has a tracker mortgage with Permanent TSB. Her boyfriend also has a property with his own mortgage which is not a tracker. They want to move in together and rent my daughter’s apartment. The rent should cover most of her mortgage, and she will pay “rent” to her boyfriend to help with his mortgage.

If they proceed on these lines will she be breaking the terms and conditions of the tracker mortgage and then be exposed to a negotiation of a new mortgage and lose the tracker benefit?

- Mr D McM, e-mail

A

As you correctly perceive, a tracker mortgage is a contract – in this case between your daughter and the lender. She should certainly check with Permanent TSB before making any decision. It may be that the mortgage contract requires her to be an “owner-occupier” in order to avail of the terms of her tracker rate. Renting out her apartment could prove more costly than she thinks if it costs her the tracker.

Savings in one year, Dirt in the next?

Q

My bank has recently paid me annual interest on a number of deposit accounts. I have been charged Dirt at the new 2011 rate of 27 per cent on all of the interest, even though the majority of interest would have been earned during 2010.

Is this correct or should the Dirt have been calculated at 25 per cent on the 2010 portion of the interest earned, with the remainder calculated at the 27 per cent rate?

- Mr JK, Dublin

A

Unfortunately, the bank is correct. The change is not of their doing and it does involve an element of restrospective taxation. At the time you invested, for the year, Deposit Interest Retention Tax (Dirt) was levied at 25 per cent. For fixed-rate accounts – where the investment decision was made in part on that rate – it seems only fair it should apply to the fixed term. Unfortunately that is not the case. The Budget made clear that the new higher rate of Dirt applied to all interest paid this year, regardless of when most of it was accrued.

Keeping the deeds to your house safe

Q

Regarding the query about house deeds recently one can now register house deeds with the Property Registration Authority of Ireland (a Government authority) for a once-off cost – €25 in 2008 – thus getting rid of the worry about storing the deeds.

- Ms S L, Wicklow

A

The Property Registration Authority is the repository of the Land Registry. Where a property is registered, it will be possible for a person to apply for a copy of the deeds in the event of the documents being mislaid.

However, a spokeswoman for the authority cautioned that it does not necessarily have the deeds for all properties in the State. Anyone worried about the security of their deeds and the possibility of replacing them (if necessary), should contact the authority. If their deeds are not already registered, they can be registered for a once-off cost.

This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2. E-mail: dcoyle@ irishtimes.com