§ Mr. TylerTo ask the Chancellor of the Exchequer what are the costs to the Treasury of mortgage interest tax relief and its year-on-year projected costs through to 1995–96, displayed at current prices; and what would be the effect on these costs of a 1 per cent. fall in interest rates.
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§ Mr. DorrellThe cost of mortgage interest tax relief in 1992–93 is provisionally estimated to be £5.2 billion based on the conventional assumption of no further changes in interest rates. A further one percentage point fall in interest rates—if assumed to take effect from 1 January 1993—would reduce the cost to about £5.1 billion.
The cost in future years will depend on the pattern of borrowing, the eligibility of borrowers for mortgage interest tax relief, tax rates and interest rates.