The aim of the game is to pay down your debt on your owner-occupier. That creates an incentive to pay back personal debt first. If the interest on your investment mortgage is still tax deductible, then your investment debt has a tax benefit, whereas your owner-occupier mortgage does not. So paying down personal debt frees up useable equity, whereas paying investment debt may not.ģ) It can help you save on tax. This isn’t available for many investment properties, because they are highly leveraged. Most investors borrow against their main home to fund the deposit for an investment property. If worst comes to worst you can always sell your investment property to pay back the mortgage, but you may not want to sell your main home if you get into a tricky financial situation.Ģ) It can help you grow your portfolio more quickly. They’ll then use that money to pay down their own personal debt more aggressively.ġ) It helps to protect your main home. In this case, the borrower will take the money they would have used to pay down their investment mortgage. Similarly, if you have an owner-occupier mortgage, it is generally better to pay this down first rather than paying back debt on your own home and your investment property at the same time.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |