Please join the discussion on the Gozo Minister’s loan and his monthly repayments
Twanny Bronka hev de bikk loan det he pay until he more den 90. De peoples dey beliff enytink.
Gozo Minister Anton Refalo told The Sunday Times that he is paying off his bank loan of Eur812,000 (his declared income last year was Eur45,000) at Eur2,250 a month.
I dug out my trusty calculator and worked out how long it will take him to pay off Eur812,000 at Eur2,250 a month: THIRTY YEARS. And that’s just the capital – maybe there’s some banker or accountant out there who can be fagged to work out how much longer he’ll have to keep paying to settle the interest too.
Now here’s the thing. Anton Refalo is around 60 years old, which means that to pay off the capital alone, he’s going to be shelling out Eur2,250 until he’s 90.
And we are expected to believe this rubbish or that some bank was mad enough to five a loan of close to a million euros to a man a couple of years away from retirement age and set repayments at a level where he might be done by the time he’s close to 100.
Maybe when he gets tired of it, he’ll just sell a few of his 23 pieces of property and pay off the loan in a lump sum.
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I want to know which bank is offering these fantastic rates because if he has a loan at the going rate of around 4% interest then what he is paying does not even cover the interest (2700 per month) let alone the principle.
At 3.5% interest over 30 years, the monthly repayment would be in the region of Eur3,600.
[Daphne – Thank you but the 30-year figure is mine, calculated on the capital alone. The two figures we have from him are the capital (812,000) and his monthly repayments (2,250). So you’d have to work with those to calculate how far beyond 30 years he has to work to pay off the interest too.]
There is no chance whatsoever that €2250 is the repayment. Simple test.
If capital is €812k, and interest is 3.5% let’s say, then annual interest in the first month is:
812000 * 3.5% / 12 = 2368.33
He’s only paying €2250. therefore not even the interest itself let alone capital. It’s impossible for him to be paying just 2250.
The absolute minimum interest rate he might be paying is 3.325%. (812000 * 3.325% / 12 = €2249.92 interest only)
We’re not being told the truth here. If I were the Opposition, I’d get an independent accountant/auditor to prove this, and table a PQ.
So the question now is how does The Sunday Times publish a story like this without doing the simple maths and going back to the minister with more questions.
By just publishing the minister’s reply they give it credence and by not checking things out they are not serving their readers well.
And what is he living on if he pays € 27,000 per annum and earns €45,000 pre-tax per annum ?
We may not be suckers but most of the electorate is.
Tant huma kif ngħidu bl-Ingliż “brainwashed” li jibilgħu u jemmnu kull ma jgħidulhom mingħajr lanqas biss jippruvaw iħaddmu ftit dak il-moħħ magħluq li għandhom. Forsi xi darba jinfetaħ ( moħħhom) u jiskopru għaġeb tal-għoġbijiet ….nibża’ imma li imbagħad ikun tard wisq.
I believe the Community Chest Fund should step in and help Anton Refalo.
Marie Louise, dan ir-ragel ser imut bil-guh.
Jehtieg li tghinuh miskin.
Kaz genwin. Taghna lkoll.
Peppi can organise another ‘maratona.’
Hi Daphne, I worked out from the two figures given of the loan principal of €812,000 and the loan repayment of €2,250 per month (which normally is inclusive of interest) that if we apply an interest rate of 2.208% we get a repayment of €2,250.36 and such loan would need to be paid over a period of 50 years.
My question:
What is the reasonable re-payment rate a bank manager would accept in the circumstances for that loan?
answer: repayment rate depends on the personal circumstances of the borrower, which definately the lender would take into account the borrower’s level of income to arrive at the “disposable income” (ie to evaluate if borrower can sustain the repayment amount).
However, rate of 2.208% is very low and normally is exceptionally given if there is minimum risk to the lender (such as lending is made against cash cover as security).
However, a 50 year loan is commercially not realistic and from my knowledge, it is unavailable!
It depends whether the bank manager has the power to jump the Gozo Channel queue or not.
correct, but is 2.208% realistic? it’s far too low, far too low.
I think that he has enough money under his mattress to pay his loan at one go. In Gozo everyone knows each other and cannot hide.
The interest rate is a variable, but at a prudent 3% it would take him 77 years to pay off the loan.
http://www.thisismoney.co.uk/money/cardsloans/article-1633405/Loan-repayment-calculator.html
Probably the stupid ones of the Labour supporters will believe him. These people are dirty.
‘pimps, thieves and scoundrels’ with their snouts deep in the trough
Being a liar, I think , is one of the virtues of our Labour Ministers.
Don’t tell me, let me guess. Has he by any chance got his loan with the same bank that Daewoo had its loans with?
His voters know that he is cunning but that is why they vote for him and admire him.
So much for the furore created by Labour about the 500 euros per week during Dr. Gonzi’s tenure.
Muscat is making sure that his ministers and parliamentary secretaries and himself are getting richer by the day.
The more condescending Muscat is towards his voters, the more they applaud him.
Suckers.
Does Minister Anton Refalo think he is going to remain a cabinet minister for thirty years?
It depends on the interest rate and repayment agreement. It takes 77 years to amortise a loan of Eur812,000 at Eur2250 monthly at an interest rate of 3% which is a typical rate for home loans.
Commercial Loans would have a higher rate of interest of around 6.5%, in which case the interest alone would be much higher than Eur2250.
The above is based on amortising loans. Other loans can require the periodical payment of interest with capital then being paid from sale of other assets say within a 2 year period (bridge loans) or a 5-year period (interest only loans) or from sale of property development units, other assets within a property / investment portfolio etc.
Either he is a liar, or the banks are discriminatory. Last year I enquired with two banks what chances I have for a loan of €10,000, and was refused on account of my age.
Daphne , I have financially helped my son and daughter all through their travails, university, purchasing their home, and then some more, leaving myself pretty dry in the pocket. I would have offered him help if I were not in dire straits myself. Poor man.
These bl**dy immigrants – you let them into your country, they multiply, and their offspring end up criminals.
http://www.timesofmalta.com/articles/view/20140727/local/Maltese-national-in-16m-UK-fraud.529346
This is no laughing matter. Are cabinet ministers immune to scrutiny from the Tax Compliance Unit?
Apparently so and this twat has been dodging them a long time
Paying back the bank is the tip of the iceberg. The loan is not reflected in his assets, which I do strongly believe are incomplete. This is not only from the accounting point of view but also from the income tax point of view with both of which I am conversant.
It’s all part of Eco Gozo of course.
He’s found a way of growing money on trees.
I recently enquired about personal loans myself. Maltese banks will not give personal loans whose payment (all capita + interest) goes beyond the age of 65. So how old is the guy?
[Daphne – 59/60.]
If he is 59 or 60 he should retire at 62 the most ie in two years ie 24 months.
Banks normally insist that all loans are normally paid by retirement age with installments not exceeding one third of the total income so our dear minister has only 24 months to pay his hefty loan of Euro 812,000 or Euro 33,833 a month (not considering interest rates) which would reach in the region of Euro 64000 more.
On that declared income and age bracket APS might grant him a loan of circa 100k. Repayments would have to be of about 1400 a month. BOV and HSBC would probably tell you if you furnished them with the data: i.e. age and income.
The interest and amortization may be influenced by what the loan is secured with.
If partially secured, it is improbable that a bank would extend the amortization period beyond 25 years. Banks have rules which vary somewhat but in this case it appears that the bank has really disregarded its own established rules.
An €812,000 loan, amortized over 25 years at 3.29 % interest rate (tough to beat) requires payments of €3965 per month.
If he reported payments of €2250 per month on his Declaration of Income and Assets, then there is something awfully wrong. What is being generally ignored, is the fact that banks have yet another calculation which they do and if the applicant fails it, then the loan is not granted.
2250 x 12 = 27,000. He declared an income of €45,000. So his Gross Debt Service Ratio (GDSR) = 60%.
Which bank would grant a loan of ANY amount if, in order to pay back the loan, the yearly payments amount to 60% of his GROSS income? Remember that from the remaining 40% he has to pay income tax, buy groceries, clothing, pay cheap electricity bills, personal entertainment expenses, medical, dental and other incidental expenses.
I think that the Opposition should start hammering this idiot and if they do not, then they will look like fools.
A much deeper investigation of this man’s income, preferential bank loan, his overall assets and what the true income he is receiving from them and whether he has presented false Declarations in Parliament, is required.
Just reckoned that if he’s 60, retires at 65 and has borrowed 812k at a measly 3% per annum, he’d have to repay at the rate of 14,500 monthly, which I guess, is fairly reasonable if he rakes in 500 a month on each property { (24 x 50) = 12 000}.
.
It is an interest-only home loan probably at rate of 3.25%. The problem is that the monthly repayment equates to his monthly net income. Something does not add up here.
23 properties? Ma irridx inkun sufa f’gismu.
In a different world, Twanny Bronka would be hounded by journalists to explain the maths of it all and to expose him for the liar and cheat that he is.
The fact that he can get away with it and more so that his Prime Minister allows him to go on regardless speaks volumes of Malta’s fourth estate and of the disdain with which our Great Leader unashamedly treats the electorate.