Relief on the year-on-year rise in mortgage interest, at the standard rate.
Mortgage Interest Tax Credit
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Increase in interest
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Before the cap
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A relief built for one specific shock
The Mortgage Interest Tax Credit is not the old blanket mortgage interest relief that ran for decades. It is a narrow, temporary measure the government introduced to cushion homeowners against the sharp jump in interest rates after years of near-zero borrowing costs. The logic is targeted: it does not reward you for having a mortgage, it compensates you for the increase in interest you paid this year compared with the prior year. If your interest bill did not rise, there is no credit. That single design choice catches a lot of people out, so it is worth stating plainly before you read the result.
Only the rise counts, and only at 20 percent
Two rules drive the whole calculation. First, the credit is based on the difference between your interest this year and last year, not the total interest you paid. Second, that difference is given relief at the 20 percent standard rate, and the credit is capped at €1,250. So even a very large jump in interest cannot return more than €1,250 to you. The outstanding balance field in this tool is an eligibility check rather than part of the sum: your mortgage balance had to sit roughly between €80,000 and €500,000 on the qualifying date to claim at all. It does not change the euro amount of the credit.
A jump from €6,000 to €9,000 in interest
Take a homeowner who paid €6,000 in mortgage interest in the prior year and €9,000 this year as their tracker or variable rate climbed. The credit is worked out on the €3,000 rise.
| Step | Figure |
|---|---|
| Interest paid prior year | €6,000 |
| Interest paid this year | €9,000 |
| Increase in interest | €3,000 |
| Relief at 20 percent | €600 |
| Credit (cap €1,250) | €600 |
The chart shows where €600 sits against the €1,250 ceiling. The rise would need to reach €6,250 in a single year before the cap starts biting.
Who can claim and for how long
To qualify you must be the owner-occupier of the property and have a mortgage on it within the balance range mentioned above, with your Local Property Tax and income tax affairs in order. The relief is temporary, covering only a limited set of tax years rather than running indefinitely, so it is not something to factor into a long-term budget. You claim it by filing an income tax return through Revenue’s myAccount, entering the interest figures from your two annual mortgage statements. A practical tip: your lender issues a certificate of interest each year, so keep both years to hand, because the whole claim rests on the difference between those two numbers.
It is worth being clear about what this credit is not. It does not reduce your monthly repayment, it does not lower your interest rate, and it does not roll over from one year to the next. It is a one-off reduction in the income tax you owe for the year you claim, paid either as a refund or as a reduced liability. Because the relief targets the increase rather than the absolute size of your interest bill, two borrowers with very different mortgages can receive an identical credit if their year-on-year rise happened to match. That is the quirk of the design, and it is why entering accurate figures from both annual statements matters more than any other input.
What if my interest fell this year?
Then you get nothing from this credit. It only rewards an increase in interest year on year. If you switched to a cheaper fixed rate and your interest dropped, the credit is zero, even though lower interest is obviously the better outcome for your wallet overall.
Can both names on a joint mortgage claim?
The credit attaches to the qualifying loan and is shared between joint borrowers in proportion to how the interest is split between them, rather than each person getting a separate €1,250. The combined relief on the loan cannot exceed the cap. Couples assessed jointly simply claim it on their joint return.