Hi,
Is there some resource, on the internet or otherwise, which sets out all of the loan structures and details on them – i.e. advantages and disadvantages?
What are the advantages of interest only loans over principal and interest? How exactly to interest only loans work?
Any help is appreciated.
Thanks.
Interest only repayments are usually for investment property loans so the interest paid is tax deductible against their personal income.
Joseph I disagree many loans secured against your PPOR are interest only especially when linked to a 100% offset account.
Richard Taylor | Australia's leading private lender
Please advise why people would choose to pay interest only for owner occupied loans if they are not tax deductable ?
Thank you.
Because it gives them more disposible income to spend on appreciating assets and deductible expenses.
Also if down the track they decide to move out of their PPOR and rent the property the full amount of the interest is Tax deductible whereas if they have paid down the loan they often find themselves borrowing non tax deductible funds to purchase the new PPOR.
Richard Taylor | Australia's leading private lender
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