Mortgage Interest Relief



I’m confused about the changes that were made to Mortgage Interest Relief in Budget 2012. I’m a first-time buyer who started paying my mortgage in 2006. When will my entitlement expire and what rate of relief am I entitled to?


Tax relief for home mortgage interest is not given through the tax system but your mortgage lender gives you the benefit of the tax relief on the interest you pay. This is called tax relief at source or TRS. Your mortgage repayments are reduced by the amount of the tax credit due.

In Budget 2012 it was announced that qualifying loans taken out after 31 December 2003 and before 1 January 2013 will continue to get relief up to the end of 2017. This means that you will continue to qualify for relief at the applicable rate for the next 6 years. The relief will be abolished completely by the end of 2017.

The rate of mortgage interest relief for first-time buyers is 25% in years 1 and 2 of a mortgage, 22.5% in years 3, 4 and 5, and 20% for years 6 and 7. After 7 years the rate is the same as for non-first-time buyers at 15%.

However, if you are a first-time buyer who started paying your mortgage between 1 January 2004 and 31 December 2008, Budget 2012 provides for a special rate of mortgage interest relief of 30% for the tax years 2012 to 2017.

The amount of interest on which you can get relief is subject to upper limits as follows:


Married/in a civil partnership/ widowed/surviving civil partner

First-time buyer



Non-first-time buyer



Adjustments to your tax relief should be made automatically by your mortgage lender. You don’t need to claim relief on your annual tax return or to contact your local Revenue office.

Further information is available from the Citizens Information Centre below.

Know Your Rights has been compiled by Citizens Information Service which provides a free and confidential service to the public. Information is also available online at and from the Citizens Information Phone Service, 0761 07 4000.

Thurles CIC, 34/35 Croke Street, Thurles, Co. Tipperary. Tel: +353 504 22399. Email:

Cashel CIC, Civic Offices, Friar Street, Cashel, Co. Tipperary. Mobile: +353 86 361 6251

Nenagh CIC, 43 Pearse St., Nenagh, Co. Tipperary. Tel: +353 67 43060. Email:

Roscrea CIC, Rosemary Street, Roscrea, Co. Tipperary. Tel: +353 505 22676. Email:

Clonmel CIC, Market Place, Clonmel, Co. Tipperary. Tel: 052 612 2267. Email:

Tipperary CIC, Community Centre, St Michael’s Street, Tipperary Town, Co. Tipperary. Tel: +353 62 52102. Email: