If I pay lump sum off mortgage, will I be entitled to less TRS?

[Paulk]

Hi Everyone,

After carrying out some research re investing savings (approx. €20,000) for 6 months, I've decided not to deposit my savings following the little interest which my investment would yield, and also the growing concerns re safety etc.

I now think that I will pay a lump sum off my mortgage. However, before doing this, I want to make sure it won't decrease my TRS entitlements, thus decreasing any profit? I'm a first time buyer.

Thanks in advance.

 

[rameire]

Hi Everyone,

After carrying out some research re investing savings (approx. €20,000) for 6 months, I've decided not to deposit my savings following the little interest which my investment would yield, and also the growing concerns re safety etc.

I now think that I will pay a lump sum off my mortgage. However, before doing this, I want to make sure it won't decrease my TRS entitlements, thus decreasing any profit? I'm a first time buyer.

Thanks in advance.

it will decrease your trs, as you will inturn pay less interest on your mortgage.

trs is based on interest paid on a mortgage.
if you reduce your mortgage balance your interest will inturn reduce thus reducing the trs applicable

 

[lynchie]

TRS is based on interest paid over a qualifying year. Paying a lump sum off your capital will reduce the overall interest paid for the year thus reducing your TRS allowance.

Check http://www.jeacle.ie/mortgage to see that difference in interest.

 

[Howitzer]

If you want to deposit it for only 6 months then paying off a lump some against your mortgage makes no sense as you, probably, almost certainly, won't be able to withdraw it.

 

[Paulk]

Thanks for the replies.

I checked with Revenue and as, even after paying off a lump sum of €20,000, my mortgage interest repayments will still be over €10,000/year, I will still be entitled to the same rate of TRS.

Finance never was my forte. I just wish I'd known about this site prior to getting a mortgage!