TRS question.

salaried

Registered User
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Hello all, I just spoke to a guy in work regarding his mortgage, He is paying 1300.00 euro a month at the moment but has just recieved a letter stating that 430.00 euro a month will be payed towards that from his TRS. He said he will continue to pay the original mortgage amount for the time frame of the TRS as this will reduce the period of the mortgage as he is not getting any younger. I was just wondering which would be the best bet for him financially, (1) Keep paying the 1300.00 euro per month regardless of the TRS, or (2) Pay 870.00 euro per month and the TRS covers the balance and put the 430.00 euro saved in to a good savings account.
 
Hello all, I just spoke to a guy in work regarding his mortgage, He is paying 1300.00 euro a month at the moment but has just recieved a letter stating that 430.00 euro a month will be payed towards that from his TRS.
This will be till the end of this year (dec 2011). This is because he was probably due arrears. Next year it will be adjusted to the normal rate of around 120 a month if he is still entitled to the full amount.
 
They quicker he pays the mortgage the better - he won't get 4.7% interest in any saving account so I think he is correct. However if he pays the 1300 each month his mortgage may just sit in credit. He will need to ask the bank ( in Jan next year) to use the credit to shorten the term of the loan or reduce his monthly payments and keep the term the same. Reducing the term is the best option he is sure he can afford it.
 
Thanks for your replies all, Elcato I was a bit wary of the amount myself, He has been paying this amount for the past 16 months, He has only recently claimed his TRS. Do you know how long the TRS runs for, It has been a few years since I dealt with it.
 
TRS runs for 7 years from when you start paying the mortgage. If you don't claim it straight away then they will pay the arrears in the first year you claim. So say he was owed 16 months of circa €120 relief and he starts claiming this year he will get 16 x 120 = 1920. This will be spaced out over the remaining months of the current year. After a few years your rate drops so the relief is less (see link above for exact figures) and also your interest may not be above the threshold. Bottom line is he will get a lot less TRS relief in the following years. These figures are estimate but you should get the gist.
 
Guys I really appreciate your responses, I hate to rain on my friends parade but I knew something did not add up, Again thanks very much, Regards Salaried.
 
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