Mortgage Interest Relief - Calendar Year?

Hi

I am a first time buyer purchasing a house with the deal in the final stages. Someone told me that if you close the deal, i.e. final contracts in place, drawdown, keys handed over, for example on Dec 18th you will get interest relief for the date of closure, Dec 18th, 2009 to Dec 31st, 2009 but that this will then take one year off the seven you are entitled to. Or in other words, in Jan 2010 you will have six years then remaining.
While if closed in Jan, 2010 you will have the full seven years remaining.

I asked my solicitor and bank about this but they said this is not the case (but seemed unsure). I asked my solicitor to put the closure date in early Jan 2010 in any case. Just thought it was not worth the risk of losing a year's relief for the sake of a week or two.

Is this true? If so why do the "professionals" not seem to know, why would anyone close in December?

Thanks

Thats true......you will loose 1 year

I thought the same as OP but when it was recently queried with an accountant I was informed that this is not the case, that if interest relief was only calculated up to year end that no one would sign contracts in the latter half of any year! Im hoping this info is true as my own start date was December 23rd.

If someone draws down their mortgage in December 2009 & make their first repayment in December 2009, then 2009 is classed as Year 1.

If someone draws down their mortgage in December 2009, but don't start their repayments until January 2010, then 2010 is classed as Year 1.

You don't apply for TRS until you after you make your first repayment. Revenue go by the date of the first repayment as specified by the applicant on the TRS1 application form.

Pretty certain my first year were just the last two months of a calender year. A bit annoying alright!

Thanks all for the responses, looks like I may have been ok closing in Dec with first payment was in Jan. Interesting that the revenue go by first payment date as opposed to closure date when interest would apply from closure date.

Even more interesting that solictor and accountant did not say anything about this and just went by what the herd do "must be ok, otherwise no-one would finalise in latter part of year" - advice based on practice and not facts, scary..