Mortgage interest relief scheme to be ready in new year, says McGrath

A new mortgage interest relief scheme for homeowners affected by rate hikes will be set up and ready for use in January, Minister for Finance Michael McGrath has said.

Mr McGrath also promised homeowners that the scheme would be easy to use and that payments would be issued promptly.

The relief, announced as part of Budget 2024, will apply to those with a home loan of between €80,000 and €500,000 at the end of last year and will cover changes to mortgage repayments over the course of 2023, up to a maximum of €1,250.

The scheme will operate for one year only and will be based only on the increased amount of interest paid in 2023 compared to 2022.

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[  More than 135,000 mortgage holders excluded from new interest relief scheme ]

Giving an update on its development on Tuesday, Mr McGrath said Revenue are currently developing the online portal for those wishing to claim mortgage interest tax relief.

“I expect that it will be complete and ready for use early in the new year, hopefully in the month of January and it will be through the My Account PAYE service. It’s a service that people are well used to. It will be user friendly, and the payment will be administered very, very quickly by the Revenue Commissioners.”

The scheme excludes those with balances on their mortgage below €80,000.

Explaining the rationale behind this, Mr McGrath previously said it was “not possible or desirable for the Government to alleviate the full impact of the increased interest rates for all mortgage holders”.

[ Making sense of the mortgage interest relief promised in Budget 2024 ]

“This Government is of the view that taxpayers with mortgage balances of less than €80,000 on December 31st, 2022 are in general more likely to be in a relatively strong financial position in comparison to those with larger mortgage balances. Therefore, it is reasonable to expect that they should have greater capacity to absorb the impact of the recent increases in mortgage rates.

“In addition, such individuals are likely to have significant amounts of equity built up and have relatively low ‘loan-to-value’ ratios. This means that such individuals should have better opportunities to switch their mortgages and obtain more favourable interest rates, which will ultimately reduce their interest liability without the need for Government intervention.”

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