Managing Your Money, Don’t get Burnt by Higher Rates

The Sunday Business Post, June 10, 2007, by Louise McBride

Interest rates have been increased again, so now is a good time to re-evaluate your mortgage, writes Personal Finance Correspondent Louise McBride.

The President of the European Central Bank (ECB), Jean Claude Trichet, may be one of the most predictable men yet. But his interest rate annoucement last Wednesday sent European stock markets reeling.

Although mortgage interest rates are increasing, rates are usually lower than those charged on other types of loans. It’s therefore important not to overstretch yourself, advised David McCarthy, managing director of Galway financial consultants, McCarthy and Associates. “You will still come across people who take on mortgages that are too small as they want to keep their borrowings down to the bare minimun,” said McCarthy. “But they may need whatever spare cash they have, for example, to buy a car in a few years, and could be forced to take out expensive term loans to finance such purchases.”

Save on your insurance by Louise McBride

Apart from your mortgage and other debts, insurance plans are the most likely financial products to eat into your pay packet each month.
“Every product is suitable for someone, but the widespread sale of PPI is not neccessary,” said David McCarthy of McCarthy & Associates. “People are paying for cover they will probably never need and, if they did, would have only a slim chance of making a successful claim. “The number of claims made on PPI policies is minuscule compared to the numbers of people who have bought these policies. The policy conditions are so stringent that it is very difficult to make a successful claim.”