Should I opt for one of BOI's fixed-rate mortgage deals?

Bank of Ireland has some new fixed-rate mortgage deals from 3.35%. Is it a good time to fix and if so, should I go with BOI? I'm a first-time buyer. - Bill Tyson

The downside with Bank of Ireland's fixed rates is that you may revert to its variable rate when the fixed period is up. And these varaibale rates tend to be among the dearest on the market.

For example, the eye-catching 3.35% rate is over two years – a relatively short term. After that, you can always lock in again but if you don't, you could be on a variable rate of 4.5% with BoI (90% Loan-To-Value), when KBC's corresponding variable rate is 3.65%, by comparison.

However, BoI's new fixed rates are certainly among the cheapest over three and five years. And when you add in its 2% cash-back offer, this tips the balance in its favour for many borrowers. You can checkout and compare all the latest rates on www.bonkers.ie.

BOI is focusing its best deals on fixed rates and says seven out of 10 new owner-occupiers are now fixing. It claims to be doing this to save borrowers from interest-rate fluctuations. But cynics might also suggest it just wants to tie them down for longer!

Whether or not to fix, usually depends on where we are in the interestrate cycle. But while general interest rates are at rock bottom and can hardly move any lower, the Irish mortgage rate cycle is a little out of whack, with Irish banks still charging more than the rest of the eurozone. So, there could be roomfor rates, both variable and fixed, to go lower still.

Q. I acquired 30 shares in Vodafone, my holding in Eircom (now Eir). I've been offered the chance to sell my 30 shares at apparently low cost. What are the tax implications?

A. You are not alone. There A. are 334,000, mostly unwitting, small Irish shareholders in Vodafone who came across their holding when Eircom sold its mobile division Eircell to Vodafone.

with Vodafone shares currently trading at around €2.81, your 30 shares would be worth €84.30.

If you sold your shares in normal circumstances, the cost of doing so would eat up much of the value of your holding. Irish stockbroker Campbell O'Connor charges €40 per transaction, for example, which is cheap for a one-off paper share transaction. With the Vodafone share deal, thereis no charge for selling less than 50 shares (after that it's 21c per share up to a maximum of €42.) So yes, it is a good deal.

Vodafone is doing this because it doesn't want to have to send out annual reports and letters to so many shareholders whenever a corporate issue arises. You and hundreds of thousands like you can sell these shares that you otherwise would have held onto with little enthusiasm simply because they weren't worth selling due to the cost.

If you acquired your Vodafone shares through the Eircell deal back in 2001, there should be no tax implications. The Revenue Commissioners have decreed that former Eircom shareholders need to get €4.58 per share to make a profit on Vodafone—and the price is nowhere near that.

Q. You wrote recently about the arrival of Pepper on the Irish mortgage market, providing loans to those with poor credit records and/or irregular employment. Where can I find them?

A. Pepper is doing business only through certain mortgage brokers. You can find a list on the company's website: www.peppergroup.ie.



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