Clear entire mortgage or leave balance for TRS?

K

kfpg1

Guest
I have a mortgage on my current PPR.
The level of interest being paid is already below the maximum ceiling. Interest on mortgage last year was only €2500.
I actually have the funds to clear the entire mortgage.
Is there any benefit in perhaps paying off a large lump sum and leaving a residual on the mortgage in order to still get some tax relief at source. (I don't think so but second opinions will hopefully clarify) Thanks !
 
Yes - useful article. Good point about the life assurance. When I look at the numbers my TRS last year was only €500 anyway but I paid €125 in life premium so nett relief to me essentially only € 375 !!. Decision = not worth wasting time over - will clear mortgage - Thanks Clubman.
 
In most or all cases I reckon that home owner mortgage interest tax relief is marginal in the greater scheme of things and not really worth worrying about. Remember that even though you are getting some tax relief on the interest component of the mortgage repayments it is limited, the mortgage repayments are out of net income (so you may be paying 20% or 42% on the full amount you pay on the mortgage and then getting 20% "back" on only a portion of that) and mortgage interest tax relief is also capped. Ultimately the mortgage repayments are a net cost to you even after tax relief so if you can afford to clear the mortgage and forego these (and mortgage protection life assurance) payments then you will be better off (assuming of course that you don't need to borrow at higher than mortgage rates in the short/medium term thereafter).
 
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