Up until April 2000, millions of borrowers had the benefit of using their mortgage interest payments to reduce their tax bills.
In its most beneficial form the MIRAS (Mortgage Interest Relief At Source) scheme allowed tax relief on interest for mortgage amounts of up to £30,000, and unmarried couples with joint mortgages could claim tax relief for mortgage amounts of up to £60,000.
For example, based on the first year of the mortgage, a home with a mortgage of £60,000 could claim tax relief on interest charges on £30,000 of the mortgage amount. At a 14% interest rate the annual interest charge would be £4,200. This could be offset against the tax bill at the basic rate of tax. Back in the 90's this was worth over £1,050. You can double the figures for a joint mortgage.
We've created the MIRAS calculator below estimate how this could possibly be re-implemented today as interest rates rise.
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