Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Tracker Mortgage Question

Options
  • 11-12-2013 6:14pm
    #1
    LizardKing
    Registered Users Posts: 1,595 ✭✭✭


    Howdy

    I'm sure someone can explain this to me

    So I luckily have a Tracker mortgage however the last 2 rate reductions have seen my monthly repayments go up slightly rather than down.

    I rang my Bank and was told this is due to the level of TRS being decreased

    Anyone able to explain this to me ? Bit confused !! :confused:


    Thanks


Comments

  • Options
    #2
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    TRS is a percentage of your interest returned in tax relief. If your interest reduces then its possible your TRS can reduce aswell.

    it will depend on what year you bought and a whole load of other things to understand what your relief ceiling is and your TRS rate but obviously you were at tipping point and the reduction in interest over the year although it seems unusual you must have a pretty small mortgage.

    Heres two scenarios to explain it to you

    Scenario 1

    lets assume you paid exactly 3000 in interest before the rate drops. 3% on a 100k outstanding mortgage. The rate dropped by .25% so your yearly interest would then be €2,750 so you would lose €75 over the year. Roughly they reckon each 100k reduces payments by €15 a month so down by €180 in the year so in theory you would be up approx €100

    Scenario 2

    lets assume you paid exactly 1500 in interest before the rate drops. 3% on a 50k outstanding mortgage. The rate dropped by .25% so your yearly interest would then be €1,375 so you would lose €125 over the year. The interest reduction however would save you maybe €7.50 a month or €90 in the year and therefore you would be down €35 due to the rate cut.


  • Options
    #3
    LizardKing
    Registered Users Posts: 1,595 ✭✭✭LizardKing


    Thanks for the reply.

    I have about 238k left on mortgage approx 20 years to go.

    Have had mortgage since 2007.

    I paid a little off it and over pay by 50 euro a month too to bring the term down.

    Not sure if that affects this as well.


  • Options
    #4
    Carawaystick
    Registered Users Posts: 8,779 ✭✭✭Carawaystick


    Is this because the bank/taxman would have assumed you'ld pay X in interest per annum, and would get Y in yes per annum, but now you're gonna pay X-I and so you should get Y-j trs

    My bank hasn't written to me about the rate cut in November, and repayment was higher in Dec than in Nov

    They also have it issues with it and are money launderers for Iran...


Advertisement