Mortgage Interest Releif

Mola1

I have had a mortgage of €97,000 since April 09 and got Mortgage Interest Releif from July at €75 a month, checked this morning this months payment has been reduced to €32 which i thought was very little so I rang revenue who told me, (after a 18mins of being put on hold :mad:) that yes, its right,because it didnt start till July and ran to Dec it had been doubled? i half understood this.. Im just wondering if it sounds right for the amount of the mortgage? its over 25 years!!

The_Conductor

Sounds very wrong-

the ceiling on your applicable TRS, is dependant on whether you are married or single and whether you are first time buyer or not.

Mortgage TRS is paid @ 25% of interest in years 1 and 2, 22.5% in years 3,4,5 and 20% in years 6,7 (+ extended years)- up to a limit of 10k for a single person or 20k for a married couple.

Assuming a 5% interest rate on your mortgage- you would be charged ~4,700 interest in year one, or ~2,350 in the six months from July to December 2009.

1/4 of this interest is granted relief aka EUR587 for the final six months of 2009- which if you divide by 6 works out at about 98 Euro per month (obviously if your interest rate is lower than 5%- you'll be paying less interest, and thus generating less relief).

In 2010- you will be paying approx 4,600 in interest (once again assuming the 5% interest rate), generating approx 1,150 of mortgage relief. When this is split in 12- you get roughly 96 Euro- very slightly less than previously, but not a fraction of it.........

The EUR32 a month would be accurate- if your ceiling was at a very low level (for one reason or another). For the purposes of the above calculation I am assuming its your PPR, you bought alone and you are a first time buyer....... If your ceiling is articifically low- it could be accurate- but you haven't given any information to indicate it might be.

Mola1

My first year interest is fixed at 3.2% which will probably change in May as thats when i made my 1st mortgage repayment. This was my first property and i bought alone so this obviously affects it? i worked it out, and i may be wrong but i got €59 a month, who can i talk to about this? had alot of problems talking to revenue and they had me on hold for €15mins, the lady i was talking to wasnt overly helpful either,she said because my mortgage is small then its "probably" right? dosnt sound too convincing to me!

The_Conductor

You should be getting roughly €63/month relief- with monthly payments of about EUR475 before tax, and roughly 412 a month after.

Your total annual interest charged is ~EUR3020- which results in TRS of EUR760- which if you split by 12 gives you the €63/month relief

Its actually a fairly easy calculation- you need to get onto your lender and ensure that TRS is being applied accurately to your mortgage- the figure you were given on the phone is quite simply, incorrect.