Increases in mortgage interest relief introduced in last year's budget, coupled with rising international interest rates, have seen the cost to the exchequer of providing mortgage relief rise by an estimated €200 million this year, according to new Revenue figures.

This is almost three times the amount that Minister for Finance Brian Cowen had estimated the increased ceiling for the relief would cost when he announced the move in last year's budget.

Announcing that he had decided to favour increasing mortgage interest relief over changes to stamp duty last December, Mr Cowen said the total cost of the measure would be €74 million over a full year.

This figure included relief for first-time buyers and existing homeowners and an increase in rent relief for those living in the private rented sector.

According to the Revenue figures released to The Irish Times, however, the estimated cost of providing mortgage interest relief will be about €560 million in total this year. This compares to a total cost of € 279 million in 2005 and €351 million last year.

A spokesman for the Department of Finance acknowledged last night that the estimated cost of the mortgage interest relief scheme was "inaccurate". However he said increases in the ceiling on the relief, as well as higher interest rates, which pushed more people towards the ceiling for the relief, were major factors.

Another factor was a recent increase in the numbers applying for the relief, he said, adding that estimates were continually reviewed.