Re: >> Process of claiming mortgage interest relief.
The relief is quite straightforward. In the example above a couple jointly named on the mortgage can claim relief on a maximum of €8,000 interest paid each year. If they pay less than that then they only get relief on the lower amount. If they pay more they still only get relief on €8,000. Relief is granted at the standard income tax rate of 20%. So the maximum relief available in this case is €8,000 @ 20% = €1,600. This represents the equivalent of €1,600 / 12 = €133.33 into your hands each month (or more accurately a reduction of that amount in your mortgage repayments since the relief is granted at source by the lender).
I don't have any direct experience of claiming outstanding relief but others here have reported that since the introduction of owner occupier mortgage interest tax relief at source (i.e. at the lender rather than via tax credits/allowances) outstanding relief is credited to the borrower's mortgage account with the lender. But to be sure you should ask what way outstanding relief is dealt with in your letter.