I am six years into a 25-year mortgage from PTSB with a balance of €110,000 on a property worth approximately €350,000. I've previously taken the three-year fixed rate. The fixed-rate period is due to expire in the next month.

I'm uncertain as to the best option, eg fixed or variable. I recall reading that one should negotiate with mortgage vendors to get a better rate - I note the difference between the rates offered to new and existing clients for example - but am unsure how to approach this negotiation. Would it be useful to go through a broker?

In addition,I may also have a (non-SSIA!) lump sum available to put into the mortgage. I've heard of principal-only repayments from a friend in the US. Is there such a thing here? I am aware that there would be a penalty depending on the difference between fixed and sum variable rates if I lodged a lump now.

Ms A.B., Dublin

There are two very separate issues here. Taking them in reverse order, there is nothing to stop you reducing the principal outstanding on your loan by making a lump sum payment to your lender from a maturing SSIA or anywhere else for that matter. This is not purely a feature of the US market.

The one proviso is that people on fixed rates will find their lenders reluctant to allow such lump sum payments as it upsets their sums. It would constitute breaking the fixed rate and would attract a penalty payment.

Having said that, your current fixed rate is due to expire next month. There seems nothing to stop you, at that point, making such a lump sum payment, regardless of your future intentions on repayments options.

Whether you choose a fixed or variable rate option is really down to you. My view, in general, has been that financial institutions rarely get caught cold by interest rate movements. Any advantage in such contracts is more likely to favour the institution than the borrower.

Unless you are so tightly stretched to make repayments that you need the certainty of a fixed monthly repayment - and that is unlikely if you are already six years into the loan - I would stay away from fixed rates.

That leaves you with a lender's standard variable rate or a variation of that which is increasingly popular these days - the tracker rate. This "tracks" the European Central Bank rate - staying within a certain margin of that rate, usually one percentage point - and such rates are currently often better value than standard variable rates.

Rates are generally expected to rise by up to one percentage point over the next 12 months.

As for negotiating with your lender, that is always advisable, although I don't see the need to invest in a broker to do so. You can simply check the rates in The Irish Times weekly property supplement and see if your lender is prepared to match the market leaders. If not, you should consider moving.

It is cheaper now than previously to move your mortgage and several lenders will offer to defray the cost by contributing to legal fees etc.

Taxed twice on UK share dividends

I receive dividends from Vodafone on shares I hold with them. Tax is deducted at source by the UK authorities at a rate of around 10 per cent. I declared this income in my year-end PAYE balancing statement, and advised the Revenue Commissioners that tax had already been deducted in the UK.

I was surprised to find that they deducted income tax on the net amount of the dividends received, and advised me a refund may be due from the UK authorities. The reply from HM Revenue & Customs is confusing.

They seem to be saying that no tax refund is due from them. Does this mean I have to pay retention tax in the UK and income tax on the balance here? Or am I just being too honest?

Mr L.M., Louth

Since 1999, Irish residents have been out of pocket on UK dividends. Given the history of most Irish investors in Vodafone - a legacy of the Eircom fiasco - and the generally small sums involved in the dividends due to the size of the average Irish Vodafone holding, it is a source of significant annoyance but it is not likely to change.

The UK authorities deduct a tax credit, which is equivalent to one-ninth of the value of the dividend. Since April 1999, this has not been refundable.

The Irish authorities then require the imposition of dividend withholding tax at the standard rate of 20 per cent - this is 20 per cent of the outstanding dividend once the UK authorities are finished with it, not the gross dividend.

If you are a top rate taxpayer, you will owe the Revenue a further 22 per cent of the post-tax credit dividend. Are you being too honest? No. Are you being taxed twice on the same dividend? Yes.

DIRT exemptions depend on income

I note from an answer last week that you referred to "deposit interest that has been subjected to DIRT as being exempt from a further tax charge, regardless of income".

My father is 74 and still has DIRT deducted from deposit interest.

He has been happy with this situation, as he assumed that as a taxpayer at 20 per cent, had he opted to exempt himself from DIRT, the income would fall into the tax net in any event and leave him no better off.

Please can you advise as to whether the age exemption from DIRT exempts the interest from all tax charges, regardless of other income.

Mr J.F., Dublin

Your father is exempt from DIRT only if his total income, including gross interest, comes to less than the relevant exemption limit which, for a single or widowed person over the age of 65, is €17,000 this year. If his income is higher, he is liable for DIRT.

By the way, last week's piece on DIRT omitted to mention that while DIRT at 20 per cent fulfils all tax obligations on deposit interest income, despite the need to return such income to the Revenue in an annual return, there will still be a liability to the 2 per cent health levy where applicable.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, D'Olier Street, Dublin 2 or e-mail to dcoyle@irish-times.ie. This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering queries. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.