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# How is mortgage interest relief calculated

## Calculate my Mortgage Interest Relief

###### Written by John O' Connor on August 17, 2009

So you have a new/existing mortgage or loan relating to your home and want to know how much you are due in mortgage interest relief . there are 3 questions you need to ask yourself in relation to this:

1. Have I an eligible loan?
2. Am I a First Time Buyer (FTB)?
3. What are the rates of relief?

We have looked at eligibility and FTB status before.  Now it’s time to calculate the Relief!

If you are a non-First Time Buyer (non-FTB), you can now claim interest relief of up to €450 a year if you single and €900 if you are married. This equates to €37.50 if you are single and €75 for those of you fortunate enough to have met the lass/lad of your dreams and married them.

now the boring stuff: how is this calculated.

Mortgage interest relief is granted on the interest portion of your monthly mortgage repayment. Say, for example you are paying €1,000 a month on mortgage payments. This is made up of capital payment (say €600) and interest payments (say €400). Depending on the amount of the loan, the term of the mortgage and the interest rate, the split between the capital and interest portions can vary from all of it being interest (on an interest only mortgage) or practically all of it being capital repayments (when you finally get to pay off the mortgage).

Important: mortgage interest relief is only available on the interest part of your monthly mortgage payment – not the whole amount

non-FTB mortgage interest relief gives you relief on the

first €3,000 of interest on your mortgage at 15%, which gives you the €450 from above. You get to double that if you are married.

If you don’t know what the split is on your mortgage or will be on a new mortgage, ask your bank. Also, your bank will send you a statement after the end of the year stating how much interest you paid in the year.

The short of it: First Time Buyers (FTB’s) can receive interest relief of:

• in the 1st 2 years of a mortgage  up to €2,500 relief a year, or €208 a month
• In years 3-5 of a mortgage, up to €2,250 interest relief a year, or €188 a month
• in years 6-7. the relief is €2,000 a year, or €167 a month
• This is doubled if married.

The long of it: For most mortgage holders, you will not get that much relief.  The interest relief above is based on paying €10,000 of interest on your mortgage a year (double if married).  The average mortgage holder you will be glad to know does not dish that amount of interest over to the bank.

Again ask your bank how much interest you currently pay on an annual basis to help you calculate the amount of interest relief due.  If you pay €5,000 a year, then you can take it your relief will be 50% of the limit above.

### Further Information

So your loan is eligible. Next you need to check out if you are a first time buyer and then calculate how much relief you are due.