How is Mortgage Relief calculated?

[blackdiamond]

Hi I'm a first time buyer that qualifies for 10k mortgage relief this year but I don't understand how our mortgage provider applies it to the loan? Do we just get 10k taken off our yearly repayments? Any info on this would be greatly appreciated.

 

[ClubMan]

You qualify for relief on a maximum of €10K p.a. If you pay more than this then you get relief on €10K. If you pay less then you get relief on the amount under €10K actually paid. Let's assume that you pay €10K+ interest. Then you get relief on the €10K cap at 20% so that's €10K @ 20% = €4K p.a. or €4K / 12 months = €333.33 p.m. This is the amount by which your normal repayments will be reduced by the lender once your application to Revenue for owner occupier mortgage interest tax relief has been processed.

 

[dodo]

Would the 10K @ 20% not be 2K / 12 =166.66 pm or am I reading wrong.

You qualify for relief on a maximum of €10K p.a. If you pay more than this then you get relief on €10K. If you pay less then you get relief on the amount under €10K actually paid. Let's assume that you pay €10K+ interest. Then you get relief on the €10K cap at 20% so that's €10K @ 20% = €4K p.a. or €4K / 12 months = €333.33 p.m. This is the amount by which your normal repayments will be reduced by the lender once your application to Revenue for owner occupier mortgage interest tax relief has been processed.

 

[ClubMan]

Sorry - my mistake. €10K @ 20% = €2K etc. I was mistakenly working off the married/joint FTB rate of €20K from memory!

 

[dodo]

Is this TRS only for first 7 yrs of mortgage only,or does TRS just get less after 7 yrs

 

[ClubMan]

Once you qualify for FTB rates of relief you get it for 7 years (not necessarily contiguous and possibly spanning more than one PPR/mortgage). After that the maximum rate of relief falls.

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