Mortgage lenders in scramble to beat tax relief clock
BANKS are scrambling to ensure mortgages are drawn down before the end of the year, amid buyers' fears that they will miss the deadline to avail of generous tax relief.
There is a race against time because the relief ends on December 31.
It is worth up to €18,000 for a couple who complete a contract and draw down their mortgage before the deadline.
Banks consulted yesterday said they were working around the clock to complete transactions on time.
But some people are set to lose out as some solicitors' offices had already closed for Christmas, according to Carol Tallon of Buyers Broker, a firm that helps people find homes and complete sales.
She said other applications were set to fall through after banks issued loan offer documents with the wrong addresses or wrong names on them.
The Government has described the tax relief as the "offer of a lifetime".
A spokeswoman for AIB said yesterday that staff were working to ensure no one missed out.
"AIB aims to turn around a completed application within 24 hours," she said. "There is no truth to the claim that we are not working extremely hard with our customers to ensure they make any deadlines in relation to processing their application."
Bank of Ireland said it had seen a surge in mortgage drawdowns in recent days and weeks.
A spokesman said: "We have communicated the timelines involved over the last number of weeks to ensure staff and customers were aware of what was required to meet the deadlines."
A rash of house sales by year's end is expected to boost mortgage lending figures, but Ms Tallon said she expects a lull in buying in the first two months of next year, with a fall in prices outside of Dublin.
Some buyers not living in the capital had not bothered to avail of the tax relief offer as they feel prices will fall in the new year, she said.
For a new buyer couple buying a €200,000 house, the tax relief could be worth more than €2,000 next year alone.
The scheme means first-time buyers receive mortgage interest relief at 25pc, while for anyone who has previously owned a home the rate is 15pc.
The relief is paid by the Revenue to the mortgage lender for five years, and effectively means borrowers make smaller monthly repayments.
The scheme means a saving of €18,000 over seven years for a couple taking out a €300,000 mortgage at a 4.25pc interest rate if they buy a house before the end of this year.