Relief is on the way for home owners whose mortgage repayments have shot up in recent years. 

A series of ECB rate rises since 2022 have seen monthly repayments rise for those with tracker and variable rate home loans. 

However, a one-year Mortgage Interest Tax Relief scheme worth up to €1,250 comes into force from today. 

To qualify, a home owner must have a mortgage balance of between €80,000 and €500,000 and can claim 20% of the interest paid in 2023 in comparison to 2022, up to €1,250. 

Minister @mmcgrathtd has announced the introduction of a one-year Mortgage Interest Tax Relief for home owners with an outstanding mortgage balance on their primary dwelling house of between €80,000 and €500,000 as of 31 December 2022. #Budget2024 pic.twitter.com/bFHyGmSHWQ

— Department of Finance (@IRLDeptFinance) October 10, 2023

The budget measure will help over 200 thousand home owners and will cost the State €125 million. 

Finance Minister Michael McGrath said the rate hikes have left many struggling.

“Increases that we saw from mid-way through 2022 have imposed a real burden on many households,” he said. 

“This relief will be of assistance; it will certainly help many thousands of households. 

“Over 200,000 mortgages, we estimate, will qualify because the amount of interest paid in 2023 was greater than that paid in 2022.”

The measure is likely to be temporary; inflation is dropping and economists expect the European Central Bank will respond by cutting inflation. 

“Markets are expecting that interest rates have peaked and are likely to fall, perhaps commencing the first half of this year,” he said. 

“But that is outside of our control; the ECB is independent in its monetary policy decisions. 

“Certainly, the market expectations are that we will see interest rate reductions across this year.” 

Last week, the ECB announced interest rates would remain unchanged at 4%.

Main image: Front door keys.