calculate mortgage interest relief

[rupert7]

I used this online calculator of mortgage interest relief http://www.mortgages.ie/index.cfm/spKey/first_time_buyers.tax_relief_calculator.html?mode=basic&go=go&buyer_type=First+Time+Buyer&term=35&amt=300000&status=Single&buyers=1&interest_rate=4.9
but my calculations differ and I'm not sure why.

My mortgage is €300,000 at 4.9% interest rate for 35 years.
First time buyer. Brought 2007. Was single, now married (haven’t told bank yet)

They give the following figures
year 1 300,000 interest €14,300.58 annual tax relief €2500

By my calculations 4.9% of €300,000 is €14,700. Where did they get 14,300?
€2,500 relief on €14,300 is a mortgage interest relief of 17%.
Where did they get that from?
My calculations is 30% of 14,700 = €4410.

I am obviously going wrong with my calculations, can someone please put me straight?

 

[mandelbrot]

Well the calculator is assuming you're a first time buyer this year. The rate for 2012 FTB is 25%. As you know, a FTB in 2007 would be entitled to 30% (from 2012 to 2017).

There is a ceiling on the amount of interest on which you can obtain relief; €10k for a single FTB (€20k for a married couple).

So the calculator is calculating maximum relief for you, at 25% of €10k = €2,500.

Now, as for the difference between the interest you've calculated and what the calculator calculates:
When you start paying a mortgage, every payment includes an amount of interest and an amount of the capital (unless you're paying interest only), that's how the loan balance reduces. So every month the amount of the loan balance is falling slightly, and accordingly so is the amount of interest, as it is being charged on a slightly lesser amount.

In your case then, since you would be paying interest in excess of the 10k limit for at least the first few years, you should be getting €3,000 of mortgage interest relief.

 

[rupert7]

thats great information, thanks a mil, i appreciate that.
so if we register as married we will get MIR on the 14,300 rather than it being capped at €10,000?
Are there any disadvantages of registering as married.
If we cannot get a negative equity mortgage to upgrade we were thinking of getting my spouse to apply for a mortgage on her own bat based on her salary.
If we are registered as married even though her name is not on the mortgage will that affect her applying for a mortgage on her own?
If you are married to someone who has a motgage and you are not a signee on the mortgage would you be considered a first time buyer or will your spouses mortgage affect this?