Q for a tax Accountant

grange mac

Hi,

Can any of you advise me on the following, bought a house in 2005 for"big" money now in serious negative equity, now I see mortgage int relief has increased. What is the best way of gaining from this, would I be better to "over pay on my tracker" or even how ecactly is it calculated, finally does it expire for me after 7years which is next year.

Thanks fellow boardiez..:D

trg

The relief is on interest therefore if you up your payments on the tracker then the difference between the prescribed rate and the amount being paid is coming off capital, which will in turn reduce your interest therefore reducing the interest relief.

Would be interested to hear others opinion on this, if your have secure cashflow then it may be beneficial to up your payments to reduce the capital element of the mortgage, the TRS is only a part-relief, you still have to pay the interest to the bank. If you can reduce the capital amount while interests rates are low then I believe this will have a higher impact over the course of a few years than depending on TRS, which you will still get while eligible for it

CBYR1983

Tax on deposits is higher than mortgage interest relief and mortgage interest relief is limited - and unless you or your spouse are over 65 or incapacitated you can't recover DIRT regardless of other income.

If your mortgage interest is within limit, weigh up your deposits.