Firstly, I'm on a fairly low income (low 30000s), and let's just assume this won't change for a while.
I get the idea that most people say IO loans are the way to go for an investment property. But am I correct in thinking the main advantage to interest only is that the interest payments are tax deductible while the principle payments are not?
So if I'm not paying that much tax is it really worth getting an IO loan?
Disadvantages of IO in my situation may be that it's harder to get a loan (banks prefer P&I?) and (correct me if this is wrong) you have to pay to refinance every 5 years or so if you want to keep the IO.
I'd really appreciate any advice. Thanks
I get the idea that most people say IO loans are the way to go for an investment property. But am I correct in thinking the main advantage to interest only is that the interest payments are tax deductible while the principle payments are not?
So if I'm not paying that much tax is it really worth getting an IO loan?
Disadvantages of IO in my situation may be that it's harder to get a loan (banks prefer P&I?) and (correct me if this is wrong) you have to pay to refinance every 5 years or so if you want to keep the IO.
I'd really appreciate any advice. Thanks