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Mortgage Interest Relief - First Time Buyer

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  • 06-08-2012 10:37am
    #1
    MarkJD
    Registered Users Posts: 802 ✭✭✭


    Hey Guys,

    In the process of looking for a house & mortgage with the other half. Currently still saving for the deposit but its pretty much all there we are just transferring it into a newly created joint savers account.

    But my main question is around the Mortgage Relief for First Time Buyers. Iv heard this is set to end at the end of December? Is this true?

    We have a house we want and put down a refundable booking deposit (new house) but as it stands right now i know we wont qualify for the full mortgage amount we need so the other half is trying to get a higher income / full time job. Is this mortgage relief set to end this year if so that would be the driving factor of getting the house this side of christmas. I hear it can be large saving over 5 years?

    Appreciate any info!


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    #2
    villa1
    Closed Accounts Posts: 3 ✭villa1


    Hi Markjd,

    My boyfriend and I placed a booking deposit on a house two months ago and we are waiting for contracts to be issued. Our aim was to get in for the mortgage interest relief.

    The government recently announced that there will be no extension after December 2012 for mortgage interest relief, and it's for 7 years not five.

    We calculated that over the 7 years we would make saving of about 15,000. But we first started arranging our mortgage back in March and I'm glad we didnt leave it any later as you would be cutting it fine to make December as you have to have paid at least one mortgage repayment to apply for MIR.

    And if you are applying for a joint mortgage your partner must be in their job for at LEAST 6 months, one bank even told us 2 years!

    Good luck!


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    #3
    MarkJD
    Registered Users Posts: 802 ✭✭✭MarkJD


    Thanks for all that information. Didn't realize you have to have made at least one payment as well. Makes things awkward! Maybe time to realize we just wont be able to get the house we want. We have had a good chunk of our deposit ready for about 2 months now but not showing together so a broker advised we setup a joint account and start banging it away into that over x number of weeks.

    We got an idea of a pre-approval from a family friend in AIB of what we would likely be able to get based on our current earnings. Thing is that was based on what my OH actual salary is but being honest over the last 5 years she has made above that on every P60 she has. So will they base it off what her actually salary is or what she has actually earned regularly each year over the last 5 years?


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    #4
    poskantor
    Registered Users Posts: 56 ✭✭poskantor


    Hmm, 15k saving over 7 years, you might want to factor in further price drops. A 300k house only needs to drop by 5% for that saving to be wiped out, which is highly likely in the next 6 months.


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    #5
    GetWithIt
    Registered Users Posts: 2,081 ✭✭✭GetWithIt


    As of today it's just over 5 years, not 7.

    FTB Mortgage interest relief does last for 7 years, however in the last budget the Govt flagged that it would end in 2017.

    Also mortgage interest relief is done on an annualized basis so this years relief is almost gone - or at least it will be by the time you make your first mortgage payment.

    So to all intents and purposes there are only 5 years mortgage interest relief left for first time buyers.


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    #6
    MarkJD
    Registered Users Posts: 802 ✭✭✭MarkJD


    Im kind of confused now sorry.

    Reading that link it states that it runs to 2017 for non first time buyers. Also if it is on a year basis I will just get the one months tax relief and it will stop completely or will it roll forward into 2013 and onwards?

    What if i was to buy a house in Jan / Feb 2013 do i not qualify at all? I was under the impression this is being scrapped at the end of this year hence why i am keen to get the house before the end of the year.


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    #7
    GetWithIt
    Registered Users Posts: 2,081 ✭✭✭GetWithIt


    MarkJD wrote: »
    Im kind of confused now sorry.

    Reading that link it states that it runs to 2017 for non first time buyers. Also if it is on a year basis I will just get the one months tax relief and it will stop completely or will it roll forward into 2013 and onwards?

    What if i was to buy a house in Jan / Feb 2013 do i not qualify at all? I was under the impression this is being scrapped at the end of this year hence why i am keen to get the house before the end of the year.
    From the link.
    Mortgage interest relief will be abolished entirely after 31 December 2017.
    No mortgage interest relief will be allowed for mortgages taken out after 31 December 2012.


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    #8
    MarkJD
    Registered Users Posts: 802 ✭✭✭MarkJD


    Sorry makes complete sense! Sorry :)


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