TRS changed but mortgage hasnt

[Newbie!]

Hi,

Our TRS has decreased by €30 per month but we are on aTracker mortgage of ECB + .95% interest rate which has not changed for some time. How, therefore, could the TRS amount change?

 

[Ludi]

Hi Newbie

the way TRS works is that you get tax relief on the amount of interest you pay up to a certain amount. The amount of interest entitled to relief depends on whether it is a single or joint mortgage. Anyway as I said the relief is given on the interest paid. As the capital balance on your mortgage reduces each year so does the amount of interest you will pay. The less interest you pay the less tax relief you get. If as expected the ECB increases interest rates later this year you will pay more interest and you should see your TRS increase in line.

Hope this helps.

 

[annie72]

The same thing happened to me last month (my TRS went down by €58!) and it turned out that it was because TRS goes down in year three of the mortgage. I knew that, but didn't realise that Revenue calculates by tax year, so even though my mortgage started in October 2009, October to December counts as year 1, and 2010 was year 2, so January 2011 is year three and that's all there is to it. Get in contact with Revenue and they should be able to clarify.