Mortgage payments increased in new year on fixed rate

[Deisce]

We got a fixed rate mortgage at 3.84% last August 06 and our monthly repayments after tax relief were 1237.97. In January we got a letter from our lender saying that there is a change in tax relief deducted at source and our payments are 1283.42. This month our lender put the new budget adjustments into place and sent a letter out telling us our payments are now 1217.86. how are these fluctuations possible on a fixed rate mortgage. I rang the lender twice last month. The first person said it is normal adjustments at start of tax year and they would be corrected in february and the second person I called says Tax relief goes down every year doesn't it. I will call them again today but does anybody know what would coz these changes in tax relief?


Deisce

 

[Buddyboy]

In our mortgage with FA, they tell us the monthly figure on the covering letter, e.g. €1000, and the amount on the statement is always that figure less the TRS credit. E.G. if the TRS is €100, then the amount transferred into the mortgage from the current account is €900.

So it looks like the total figure transferred is the sum of the TRS credit plus the net figure transferred from the current account. Therefore the net figure would change if the TRS credit changes.

Look at your statements and see if the monthly repayments including tax relief have remained constant.

Hope this helps
Buddyboy

 

[ClubMan]

the second person I called says Tax relief goes down every year doesn't it.

This is very misleading especially since TRS rates increased in [broken link removed] but perhaps your annual interest bill is below the relevant TRS limit so you are indeed getting less relief this year than last year? Post details of your mortgage amount/term/rate or else, if you know, your 2006 and projected 2007 interest bills. Or else use Karl Jeacle's mortgage calculator to estimate your interest bills for these years.