Why are my mortgage repayments lower?!

Hello all,

Please forgive my cluelessness on these matters...and please help solve a mystery for me!

I'm a first time buyer and started my mortgage repayments back in June (I opted for a fixed rate for the first year). The first couple of months my repayments were just over E1200 a month but then I finally got around to applying for the mortgage interest relief thingie. Since that came through my monthly repayments dropped to just over E850 - why such a big drop??!! I don't understand! I thought I'd get about E70 a month relief, where has that reduction come from?

Naturally I'm quite pleased about it (!) but I'm terrified it's a mistake and I'll be landed with a hefty bill very soon!

Again, please forgive my stupidity, any explanations would be greatly appreciated!

S

the reason is that your mortgage tax relief is spread over 12 months as you have applied for it recently it must be paid to you over the remaining months in this curent year...so rather than say €70 x 12, its being paid to you €280 x 3 or €420 x 2....

Perhaps u got a lump sum back of your trs. Was it just one month so far that was €850?

I taught the backdated trs was spread over your overall mortgage and not taken off in one of the months

Molly said:

the reason is that your mortgage tax relief is spread over 12 months as you have applied for it recently it must be paid to you over the remaining months in this curent year...so rather than say €70 x 12, its being paid to you €280 x 3 or €420 x 2....

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Yikes, I don't understand! Because I was a couple of months late applying for the relief I just expected to get some back-dated money (eg two/three months x E70) when the relief first came through so I thought that partly accounted for the first reduced monthy mortgage repayment - but it hasn't been a one-off, I've been paying E850 the last three months, approx E400 lower per month than the repayments at the start. Why??

I seem to have got my entire year's relief in just two months - and then got a third month thrown in!

Help!!!!!!!

Ring the tax office and ask them to explain. If it is legit, then your mind will be at ease. If it is a mistake then they will correct it and you will no longer have to worry about any surprise bills appearing at some point in the future.

soy said:

Ring the tax office and ask them to explain. If it is legit, then your mind will be at ease. If it is a mistake then they will correct it and you will no longer have to worry about any surprise bills appearing at some point in the future.

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I would say ring the bank first, the tax office may have advised them what relief to apply but the overall calculation of your repayment is not done by the tax office it would be by the bank.