Mortgage interest relief will not be restored, says Varadkar

Latest rate hike means homeowners with €200k mortgage will see repayments rise by over €3,000 a year,  Sinn Féin claims

Leo Varadkar said there are no plans to reintroduce mortgage interest relief. Picture: Gareth Chaney/Collins

There are no plans to reintroduce mortgage interest relief, the Tánaiste has told the Dáil.

Leo Varadkar said the measure existed in the past but did so, generally speaking, at a time when interest rates were much higher than they are even now.

Mortgage interest relief, which provided a tax relief based on the amount of qualifying mortgage interest that a person paid in a given tax year for their principal private residence, ended in January 2021.

"It is not something we rule out for the future but there are no current plans to do so. It would involve reopening the budget and all the consequences that would derive from that," Mr Varadkar said.

He was responding to questioning from Sinn Féin's Pearse Doherty who raised the latest interest rate increase announced by the European Central Bank (ECB).

Mr Varadkar said he hopes the latest hike by the ECB "is the last one, or failing that, the second-last one".

Mr Doherty said the jump in interest rates will mean that homeowners on a mortgage of €200,000 will see their repayments increase by over €3,000 per year.

This will have an immediate impact on the 194,000 households who have tracker mortgages.

"The fate of those on variable rates or whose fixed rates are due to expire lies with the banks and whether they decide in the coming months to pass this interest rate on," he said.

The Donegal TD called on the banks to absorb these interest rates in the interest of their customers, as they are "profitable, have an increased market share, and have paid out dividends to their shareholders already this year".

Mr Doherty said there is a particular need now to examine the issue of tailored mortgage interest relief for struggling homeowners.