TRS Calculation question!

[val23]

Right here is how im calculating my upcoming TRS.
Mortgage €136,770
Interest rate 5%.......so

€136,770 * 5% = 6838.50 *20% (trs rate) 1367.70 / 12 (months) =€114pm

Am i correct in this calculation??

Also I should be moving into my house soon and the first mortgage payment is more than likely in Dec, so what way is the TRS calculated for this? do i get just one month or do i get 12 months, if someone could work it out also for me if it is the 12 months I would be very grateful.
And if i do pay it in Dec does that mean in January in gone to my 2nd year as a first time buyer?

(repayments are €867 pm, rate is 5.568% but the .568% is rate for mortgage protection as its a local authority mortgage that is why its not calculated in the trs)

 

[Dave Vanian]

Mortgage €136,770
Interest rate 5%.......so

€136,770 * 5% = 6838.50 *20% (trs rate) 1367.70 / 12 (months) =€114pm

Am i correct in this calculation??

Not quite, unless you've got an interest-only mortgage. Use Karl Jeacle's mortgage calculator to do a more accurate calculation, which will take into account the monthly capital repayments.

Also I should be moving into my house soon and the first mortgage payment is more than likely in Dec, so what way is the TRS calculated for this? do i get just one month or do i get 12 months, if someone could work it out also for me if it is the 12 months I would be very grateful.

You'll get TRS on whatever amount of interest you pay in December, so it's just the one month.

And if i do pay it in Dec does that mean in January in gone to my 2nd year as a first time buyer?

TRS starts from when your mortgage is drawn down and not from when you make your first repayment. But that won't make any difference in your case. As you suspected, if you draw down your mortgage in December then your first year of being a First Time Buyer for TRS purposes is 2008 and you only have six more from 2009 on.

Any chance you can delay the closing until January?

 

[mayo exile]

Originally posted by Dave Vanian: TRS starts from when your mortgage is drawn down and not from when you make your first repayment.

Yes. Same answer also in the Irish Times Property Supplement (Q & A Section) last Thursday (13 November), on how much of the full 7 years higher rate of TRS you can get.

LINK: http://www.irishtimes.com/newspaper/property/2008/1113/1226408578767.html

When does tax relief on my mortgage start?

Q As a first-time buyer applying for my first mortgage, I believe you get TRS (mortgage interest tax relief at source) at a higher rate for seven years. If you draw down your mortgage in December and your repayments begin in January, when is your first year for TRS purposes? Is it December (thereby losing all of that year) or January, so gaining the benefit of the full seven years?

A What a timely question and well done for thinking ahead - it shows that long gone are the days when first-time buyers jumped in to a purchase before considering every possible angle. We put your question to financial advisor Liam Ferguson of Ferguson Associates and, according to him, TRS commences from the date you draw down your mortgage, so if you draw down in December, you lose all of 2008 and therefore have only six years TRS at the first-time buyer rates. He suggests that it would be worth while attempting to delay the drawdown until the new year, even it means you miss that psychological deadline of "being in for Christmas". This would seem to be good advice for buyers but more bad news for builders operating at that level of the market and looking at countless empty apartments and houses that are likely to remain so this side of Christmas, despite the good news for borrowers of interest rate falls.