Bought since 2004? Mortgage interest relief extended to 2018

copacetic

Haven't seen this mentioned here, may be of interest to people. If you bought since 2004, the assumption has been made that you are in negative equity, your relief would have run out next year or later. It's been extended until the end on 2017.

Mortgage interest relief was also extended until 2017, when it will be abolished. Mr Lenihan said: “As a support to homeowners who now find themselves in negative equity, I am providing that where entitlement to the relief would expire in 2010 or after, they will now continue to receive it up to the end of 2017.”

Mortgage Interest Relief
Qualifying loans taken out before 1 July 2011 will continue to get relief for 7 years. Transitional measures will be provided for qualifying loans taken out between 1 July 2011 and end 2013.

Those whose entitlement to relief would, in the absence of this change, expire in 2010 or after, will continue to qualify for relief at the applicable rate up until end 2017.

Abolition of the relief entirely by end 2017

martian1980

What I took from that is that anyone taking out a loan in the next year would continue to get seven years of relief, but I don't think it means that people with existing mortgages will get more than the 7 years they originally got

copacetic

martian1980 wrote: »

What I took from that is that anyone taking out a loan in the next year would continue to get seven years of relief, but I don't think it means that people with existing mortgages will get more than the 7 years they originally got

this is a direct quote

Mortgage interest relief was also extended until 2017, when it will be abolished. Mr Lenihan said: “As a support to homeowners who now find themselves in negative equity, I am providing that where entitlement to the relief would expire in 2010 or after, they will now continue to receive it up to the end of 2017.”

Trampas

Currently you get 7 years

So anyone who buys a house and entitled to mortgage relief after next year will only get it until 2017 instead of 7 years.

If you currently receiving relief makes no difference

copacetic

Trampas wrote: »

Currently you get 7 years

So anyone who buys a house and entitled to mortgage relief after next year will only get it until 2017 instead of 7 years.

If you currently receiving relief makes no difference

can people not read?

again:

where entitlement to the relief would expire in 2010 or after, they will now continue to receive it up to the end of 2017


http://www.rte.ie/news/2009/1209/budget2010mortgage.html

The Finance Minister has announced measures aimed at helping homeowners who find themselves in negative equity - owing more than their house is worth.

People whose entitlement to mortgage interest relief would run out in 2010 will now continue to receive it up to the end of 2017.

.

http://www.irishexaminer.com/breakingnews/ireland/mortgage-interest-relief-extended-for-those-in-negative-equity-437599.html

Finance Minister Brian Lenihan has said that any homeowner in negative equity whose mortgage interest relief is due to expire in 2010 will continue to receive it for a further seven years to 2017.


Read more: http://www.irishexaminer.com/breakingnews/ireland/mortgage-interest-relief-extended-for-those-in-negative-equity-437599.html#ixzz0ZHZqUqW9

martian1980

From doing a bit of a look around, it seems that your relief is extended beyond 7 years to 2017, but only where you are in negative equity. Suppose it's a reasonable move, with interest rates at a historical low and a lot of people only just able to pay their mortgages

The_Conductor

How do they determine whether you're in negative equity though? Being in negative equity is purely hypothetical, until such time as you attempt to sell your property which would presumably demonstrate the current market value of the property. Assuming you've already made 6-7 years of mortgage payments- you probably have a chunk of the mortgage paid off (admittedly the vast bulk of early payments are interest rather than principle payments).

Interesting!

copacetic

smccarrick wrote: »

How do they determine whether you're in negative equity though? Being in negative equity is purely hypothetical, until such time as you attempt to sell your property which would presumably demonstrate the current market value of the property. Assuming you've already made 6-7 years of mortgage payments- you probably have a chunk of the mortgage paid off (admittedly the vast bulk of early payments are interest rather than principle payments).

Interesting!

they are pretty much assuming if you have bought since 04 then you must be, which will likely be true in 99% of cases.

martian1980

There'd be a fair few grey areas there, for example, people who had family land they built on - lots of them in rural areas

Westwood

why has since 2004 been mentioned? people who bought in 2003 run out 2010 so they will get an increase of 7 years. correct.

The_Conductor

Westwood wrote: »

why has since 2004 been mentioned? people who bought in 2003 run out 2010 so they will get an increase of 7 years. correct.

The automatic assumption is that all purchases post 2004 are now in negative equity. Its highly probable that vast numbers of others are too- however they will have to fight to have this acknowledged, with those from post 2004 will automatically have their mortgage relief extended.

irishguy

Your only in negative equity if your mortgage exceeds the value of your home. If you bought at the peak and put up a 70% deposit, even with a 50% fall you still wouldn't be in negative equity. So such an assumption would be incorrect

The_Conductor

irishguy wrote: »

Your only in negative equity if your mortgage exceeds the value of your home. If you bought at the peak and put up a 70% deposit, even with a 50% fall you still wouldn't be in negative equity. So such an assumption would be incorrect

I agree with you- however my understanding is that any mortgage post 2004, irrespective of the % equity it represented, are to have their mortgage interest TRS extended.

Westwood

smccarrick wrote: »

The automatic assumption is that all purchases post 2004 are now in negative equity. Its highly probable that vast numbers of others are too- however they will have to fight to have this acknowledged, with those from post 2004 will automatically have their mortgage relief extended.

so how and where do we as 2003 purchasers go to fight ? this seems ludacris.

The_Conductor

Westwood wrote: »

so how and where do we as 2003 purchasers go to fight ? this seems ludacris.

I don't think they've thought this far ahead yet.

martian1980

smccarrick wrote: »

I don't think they've thought this far ahead yet.

I believe that MIR is done on a calendar year basis - even if I bought in dec 03, my first year of relief is used up a month later. That would mean that if I took out my mortgage at any stage in 03, my 7 years of relief would be used up at the end of 09. People won't have their relief running out during the year of 2010. I'd say they wanted to avoid having to bring people back into the MIR system whose original relief had expired and they were always going to have a cutoff at some point, so they picked the 03/04 point

The_Conductor

martian1980 wrote: »

I believe that MIR is done on a calendar year basis - even if I bought in dec 03, my first year of relief is used up a month later. That would mean that if I took out my mortgage at any stage in 03, my 7 years of relief would be used up at the end of 09. People won't have their relief running out during the year of 2010. I'd say they wanted to avoid having to bring people back into the MIR system whose original relief had expired and they were always going to have a cutoff at some point, so they picked the 03/04 point

However with an average 40% fall (and over 50% in the case of apartments) in the Dublin area- prices are in some instances already back at 2000-2001 levels. Commentators are loathe to admit this- especially as the concensus is for a further 6-10% fall in the first 6 months of 2010, before the rate of decline slows (however this ignores the possible impact of interest rate rises which the ECB has signalled may commence in Q3 or Q4 2010 (they have already withdrawn quantitative easing and are withdrawing liquidity to the commercial banks, without raising interest rates- as per the redyction in M2 supply.

The elephant in the room is the fact that 3.2% of *all* Irish homeowners are in arrears on their mortgages (not just those who bought since 2004, and also including those who don't have a mortgage at all- 3.2% of all homeowners, period). Our unemployment level is currently at 12.8% (and rising). Even with our 4.1 billion in budget cuts- we have already pencilled in 21 billion in government borrowing for 2010 (aside from the NAMA debacle which I'll choose to ignore).

We have been engaged in a whitewashing exercise- trying to dump as much dirty laundry as possible (into NAMA) and suggesting the remainder is healthy- quite simply it isn't. Our banks are on life support- and given their abject inability to raise funds from investors- totally at the behest of a government who itself is in deep trouble. Lending has not returned to the market- other than in showcase examples, small business cannot access funding, most prospective purchasers of property (and there are an increasing number of people who are in a position to purchase again) cannot, and those who owe money are still surviving via the oxygen support of low interest rates.

Giving those who purchased since 2004 a lengthening of their mortgage TRS to 2017, is a sticking plaster, designed to appeal to a group who feel they are being ignored by govenment measures. Given the further 8 billion in cuts/tax rises in 2010/2011- these are the self same group who are going to get whacked........

The whole premise of govenment actions thus far- is to do its best to try to make sure the vast numbers in arrears on their mortgages are not increased. The lengthening of mortgage TRS is simply a plank in this policy. It is doomed to failure however, as the external factors at play are simply beyond the government's control (unless as suggested by a leading investment bank last week- we elect to exit the Eurozone- which will be fought foot and nail).

Ireland and Greece have a lot in common- most notably a refusal to acknowledge the extent of our debts, and a habit of living entirely beyond our means. The Irish budget as such- was a complete joke- and our very survival is based on the assumption that we can tap international funds indefinitely (until such time as our deficit returns to the agreed 2.9% of GDP- tentatively pencilled in for 2014- but anything is possible, given the wonderous forecasting abilities of the advisors in the Department of Finance......)

I'd like to have my TRS extended. Other than increasing my disposable income slightly- its meaningless though.

Dandelion6

smccarrick wrote: »

Giving those who purchased since 2004 a lengthening of their mortgage TRS to 2017, is a sticking plaster, designed to appeal to a group who feel they are being ignored by govenment measures.

Exactly. Costs the government nothing now and in a couple years if the economy is still in the toilet - and it may well be - they can always say "oops, we can't afford to do that after all" :rolleyes: