If your mortgage payments have crept up over the past couple of years, you’ve probably wondered if there’s any relief in sight. For homeowners in Ireland, the Mortgage Interest Tax Credit offers a fixed-rate offset against that increase—worth up to €1,250 per year through 2025.

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Maximum annual credit (2023–2025): €1,250 ·
Qualifying interest cap per year: €6,250 ·
Tax relief rate: 20% ·
Eligible mortgage balance range: €80,000 – €500,000

Quick snapshot

1Confirmed facts
2What’s unclear
  • Future extension beyond 2025 not confirmed (Revenue current scheme end date)
  • Calculations differ for buyers who took out a mortgage after 2022 (Revenue current scheme end date)
3Timeline signal
  • 2022 baseline interest payments set reference
  • Tax years 2023, 2024, 2025 eligible for full credit
  • 2026 reduced credit (€625 max) introduced by Finance Act 2025
4What’s next
  • 2026 credit at 50% of interest increase, max €625 per residence (Revenue 2026 update)
  • Scheme currently ends after 2026 – no subsequent extension announced (Revenue 2026 update)

Five key parameters define the credit. Here’s how they break down:

Parameter Value
Credit rate 20%
Max qualifying interest per year €6,250
Maximum credit per year (2023–2025) €1,250
Applicable tax years 2023, 2024, 2025
Mortgage balance threshold (31 Dec 2022) €80,000 – €500,000

The implication: these caps mean the credit is generous enough to help most homeowners but won’t cover every euro of increased interest.

Who qualifies for the mortgage interest tax credit?

Mortgage balance requirements

  • Outstanding mortgage balance must be between €80,000 and €500,000 as of 31 December 2022 (Revenue eligibility criteria).

Residency and property type

  • Must be an owner-occupier; buy-to-let properties do not qualify (Revenue definition of qualifying loan).
  • The credit applies only to principal private residences (AIB mortgage FAQ).
  • Local Property Tax obligations must be up to date (AIB mortgage FAQ).

The implication: if you own a rental property or a second home, this credit doesn’t apply. It’s squarely aimed at homeowners who live in their property and saw their interest costs climb.

The upshot

Only owner-occupiers with mortgages between €80,000 and €500,000 as of end-2022 can benefit. Buy-to-let investors and those with smaller or larger loans are excluded entirely.

How much can I claim?

Calculating the credit amount

  • Tax relief is 20% of the increase in mortgage interest paid compared to 2022 (Revenue calculation method).
  • For 2026, the credit is based on 50% of the increase over 2022 (Revenue 2026 calculation).

Maximum annual cap

  • The maximum qualifying interest per year is €6,250 per property (Revenue interest cap details).
  • The maximum annual credit is €1,250 per property for tax years 2023, 2024, and 2025 (Revenue maximum credit table).
The upshot

A homeowner whose interest jumped by, say, €3,000 from 2022 to 2023 would see a credit of €600 (20% of €3,000) – still well below the €1,250 cap. The credit scales with the actual increase, so the cap only bites if your interest rose by more than €6,250.

The pattern: your credit equals 20% of the interest increase from your 2022 baseline, capped at €1,250 per year. For 2026, that drops to 50% of the increase with a €625 max.

How do I claim the mortgage interest tax credit?

Online via Revenue.ie

  1. Log into Revenue’s MyAccount service.
  2. Navigate to the “Mortgage Interest Tax Credit” section in the tax credits page.
  3. Enter the mortgage interest amounts for the claim year and the baseline year (2022) – most lenders provide an annual interest certificate.
  4. Revenue will pre-populate data where available, but you should verify the figures.
  5. Submit the claim; the credit is applied as a tax credit reducing your overall Income Tax liability.

Documents needed

  • Mortgage interest certificate from your lender for each claim year (Revenue claim documentation).
  • Your 2022 mortgage interest statement to establish the baseline.
  • If self-assessed, file through Revenue’s Online Service (ROS) rather than MyAccount.

The catch: if you don’t have your 2022 interest figure, request it from your lender. Revenue may also have it on file, but double-check to avoid errors.

Is it worth claiming the mortgage interest tax credit?

Comparing to no claim

  • The credit is designed to offset increased interest costs from 2022 baseline (Revenue purpose of the credit).
  • Eligible homeowners automatically benefit if they file a tax return; Revenue uses lender data to pre-fill (AIB automatic application).

Impact on overall tax bill

  • The credit reduces Income Tax liability only – it does not offset USC or PRSI (Revenue limitation to Income Tax).
  • If the credit exceeds your Income Tax liability, you get a refund up to the amount of tax you paid for that year (Revenue partial refund rule).
  • The unused portion is not refundable beyond your total Income Tax paid (Revenue non-refundable excess).

The trade-off: if your total tax bill is smaller than the credit, you’ll only get back what you’ve already paid in Income Tax. It’s still free money – but not unlimited.

The catch: the credit only reduces Income Tax, not USC or PRSI. If your Income Tax bill is low, you may not get the full €1,250.

What replaced mortgage interest relief?

Transition to the new credit

Key differences from old relief

  • Old relief was a percentage discount on total interest; the new credit is a fixed-rate offset on the increase only (Revenue description of the credit).
  • The new credit has a fixed maximum of €1,250 per year; the old relief had higher caps for first-time buyers.
  • Unlike the old relief, the new credit explicitly requires a baseline year (2022) for comparison (Revenue baseline calculation).
Why this matters

The switch from a broad deduction to a targeted credit means only homeowners with rising interest costs benefit. If your rate stayed flat, you get nothing – a deliberate design that aligns relief with the households most squeezed by ECB rate hikes.

Upsides

  • Straightforward claim process through Revenue’s MyAccount
  • No application deadline within the tax year (up to 4 years to claim)
  • Clear maximum means you know the best-case scenario upfront

Downsides

  • Only available for 2023–2025 (and 2026 with reduced benefit)
  • Does not cover USC or PRSI
  • Unused credit is not fully refundable if your tax liability is low

Timeline signal

  • 2022 baseline: Interest paid in 2022 sets the reference for increase calculation (Revenue baseline year).
  • Tax year 2023: First year the Mortgage Interest Tax Credit is available.
  • Tax year 2025: Last year of the full €1,250 credit – extension to 2026 halves the rate.

What we know for sure vs what’s still unclear

Confirmed facts

  • The credit is 20% of the increase in mortgage interest versus 2022 (Revenue calculation method).
  • Maximum credit is €1,250 per year (Revenue maximum credit).
  • Available for owner-occupied homes only (Revenue qualifying loan definition).

What’s unclear

  • Future extension beyond 2026 is not confirmed – the Finance Act 2025 only extended to 2026.
  • Impact on buyers who took out a mortgage after 2022: the baseline calculation uses 2022 interest, which may be zero.

Voices on the credit

“The credit is available in respect of the increase in interest paid in 2023, 2024 or 2025 over interest paid in 2022.”

– Revenue official Irish tax guidance

“Only one tax credit can be claimed for each property.”

– AIB mortgage FAQ

“The amount qualifying for relief at the standard rate of tax is capped at €6,250 per property for 2023 to 2025.”

– Revenue tax credit calculation page

What this adds up to: the Mortgage Interest Tax Credit is a temporary, targeted fix for Irish homeowners hit by higher borrowing costs. It’s easy to claim if you’re eligible, but the cap means it won’t cover the full pain of double-digit rate rises. For the typical homeowner with a tracker or variable mortgage who saw their annual interest jump by €3,000, the credit offers €600 back – useful, but not a cure. The real question is whether the government will extend the scheme beyond 2026, and at what level. For now, the move is clear: check your 2022 interest statement, gather your lender certificate, and claim that €1,250 while it’s available.

Related reading

Additional sources

aib.ie, contractingplus.com, youtube.com

Understanding how the tax credit interacts with current mortgage interest rates can help borrowers maximize their savings.

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Frequently asked questions

Do I need to apply every year for the credit?

Yes, claims must be made separately for each tax year (2023, 2024, 2025, and 2026 if eligible). Revenue pre-populates some data, but you need to confirm the figures each year.

What if my mortgage balance is below €80,000?

If the balance was below €80,000 as of 31 December 2022, you do not qualify. The credit is designed for mid-range mortgages.

Can I claim if I have a tracker mortgage?

Yes, as long as the property is your owner-occupied home and the mortgage balance was between €80,000 and €500,000 on 31 Dec 2022. Tracker rates that rose are treated the same as variable rates.

Does the credit apply to a mortgage on a rental property?

No. The credit is strictly for principal private residences. Buy-to-let mortgages are excluded.

What happens if my interest payments decrease in 2024?

If your interest paid in 2024 is lower than in 2022, you have no increase to claim against – and therefore no credit for that year. The credit relies on a positive increase compared to the 2022 baseline.

How is the credit reflected on my tax return?

Revenue applies the credit as a reduction to your Income Tax liability. It appears on your tax credit certificate or in the tax calculation section of your return if you file via ROS.