how much TRS?

hi,


We were receiving TRS of 84 euro on a joint mortgage of 170000 since 2002. We recently moved and now have a mortgage of 385000 and have been notified that TRS would be 235 euro. Were we underpaid for 4 years or overpaid now?

Not necessarily but you'd need to post more details (mortgage term and rate in each case) or use Karl Jeacle's mortgage calculator yourself to figure out (a) the total annual interest payable and (b) what portion of that amount qualifies for relief. Up to this year the maximum amount that qualified for relief at 20% was €4K per joint FTB buyer (i.e. maximum of €8K @ 20% = €1,600 p.a. or €133.33 p.m.) and from this year it's €8K per joint FTB (i.e. maximum of €16K @ 20% = €3,200 p.a. or €266.67 p.m.).

hi clubman,

The term of the first mortgage was 25 years at 3.3% and the new one is 30 years at 3.95% discounted, we were both first time buyers. Any help would be great. Thanks

It sounds about right to me. Think about it - your mortgage has slightly more than doubled and is at a higher interest rate, therefore your interest payments are notably higher. On a back-of-a-virtual-envelope basis, it sounds like the mortgage interest relief in each case is pretty much on the button (I know it's in the right region for your first mortgage, having had a mortgage of similar level over the same period).

However, given that rates may have varied, that different institutions may have slightly different calculation algorithms, etcetera, the only way to be certain is to check your mortgage statements and check that the mortgage interest relief in each month is one fifth of the interest payable, subject to the caps ClubMan has already set out.

Plugging the figures into the calculator above

With €170K @ 3.3% over 25 years the annual interest is c. €5,500 in year one and decreasing from there. So this would be under the 2006 (and earlier) joint FTB TRS limit of €8K and would mean c. €91 tax relief reducing as the amount of interest decreases. The €84 you mention above could well be the correct relief depending the actual interest paid in the most recent year.

With €385K @ 3.95% over 30 years the annual interest would be €15K in year one and decresing from there and this would be under the 2007 joint FTB TRS relief limit of €16K and would mean c. €250 relief. Again the €235 that you mention above could be correct based on the actual figures and not just my rough calculations.

So the figures look about right to me.

Thanks for that clubman and dreamerb

Clubman, Is it correct that monstie is a FTB (2007 joint FTB TRS relief limit of €16K ) as this is his second property. I know that there is a 7-year window but persumed that the FTB TRS rate would not apply if you moved PPR within the 7-Years?

-Gal1 said:

Clubman, Is it correct that monstie is a FTB (2007 joint FTB TRS relief limit of €16K ) as this is his second property. I know that there is a 7-year window but persumed that the FTB TRS rate would not apply if you moved PPR within the 7-Years?

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Monstie does remain an FTB for mortgage interest relief purposes: you retain your FTB status even if you move within the 7 year period. Form TRS1 allows Revenue to allocate the correct remaining period of the seven year FTB status to your second (or even subsequent!) PPR purchase.

Dreamerb, Using the following example. Bought PPR in June 04 as individual and got €66.66 per month TRS (€170k @ 2.7 for 30 years). Sold in April 06 and Moved into new PPR as individual in Sept 2006 (€220 @ 4.17 for 30 years) So I have used 22 months of my 84 Months (7 Years) on my first PPR so I have 62 months left as a FTB with TRS of €133.32 per month to look forward to. Is this correct? I am in the process of submitting my new TRS1. Thanks for your help on this.