How does Mortgage Interest Relief work?

You'll be glad to hear you can get some of your hard-earned cash back by claiming Mortgage Interest Relief, also known as Tax Relief at Source (TRS). This relief is available to first time buyers for seven years. In year one and two of your mortgage, you can claim TRS at a rate of 25%; 22.5% in years three, four and five; and 20% in years six and seven. Once TRS has been granted, it automatically gets lodged to your account every month. So, for example, if every month you pay €100 interest, your mortgage lender will reduce your monthly payment by €25 in year one. To apply, simply log on to www.revenue.ie or contact the Revenue Commissioners TRS helpline on 1890 463 626.

Changes to TRS entitlement from January 2014

With effect from January 2014 changes will be made to the basis for calculating the monthly TRS credit due to on eligible accounts.

To date Revenue granted TRS credits based on the amount of interest charged to a mortgage account. From January 2014 Revenue will grant TRS on the actual interest paid on a mortgage account.  The changes do not impact the TRS band or rate applicable to a mortgage account.

How will this impact you?

  • If your monthly mortgage repayment covers the interest charged in full, you will receive the full TRS credit – therefore no change.

  • If your monthly mortgage repayment partially covers the interest charged, you will receive a partial TRS credit

  • If no monthly repayment is made, you will not receive any TRS credit.

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