Mortgage interest explainer

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Budget 2024: The subset of borrowers most affected by house lending rate hikes will benefit by up to €1,250

Budget 2024: Mortgage interest relief will benefit about 160,000 homeowners, while more than half a million others who have fixed-rate mortgages or mortgages of less than €80,000 will see no benefit from the tax relief.

The Minister for Finance, Michael McGrath, confirmed the details of what have been described as targeted mortgage interest relief measures which will cost the exchequer €125 million and save more than 150,000 home owners up to €1,250 a year. The relief is aimed at offsetting some of the impact of 10 successive interest rate increases from the European Central Bank which has seen the monthly cost of some mortgages climb by between €300 and €500.No, the measures are as promised – targeted at the people who have been asked to pay a very high price for multiple rate hikes imposed by the European Central Bank since July 2022 – namely tracker mortgage holders and those on variable rates.

It is undoubtedly true to say that for many years tracker mortgage holders benefited from ECB-imposed interest rates which were at, or close to, zero. Meanwhile, people on standard variable rates and fixed rates with Irish banks were paying substantially more for their home loans.

However, he pointed out that the savings are “limited and are backward-looking, and the fact that the scheme will only operate for one year and will be based only on the increased amount of interest paid in 2023 compared to 2022 means the benefit to individual borrowers will be relatively small in nature”.

 

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