Loans

[Ben]

Im sure this has been asked a million times and its up 2 the indiv but -

For someone that intends to keep an IP for a long period of time and someone that doesnot want to be contributing to the monthly payments/costs would it be better to go for an IO loan or PI loan to keep costs to a minimum?????

 

[Rolf Latham]

Hi Ben

"Keep costs to a minimum" - Interest Only has the lowest repayment.

Ta

Rolf

 

[Ben]

Rolf, In the long term are there any disadvantages with an IO loan compared to a PI loan???

 

[geoffw]

Ben,

I think this ties in with the Anita Bell post - http://www.somersoft.com/forums/showthread.php?postid=31173#post31173. She teaches paying off your IPs as quickly as possible.

For me, and for many others on the forum, putting extra money into paying off a loan is reducing your opportunities for getting into other loans.

If you owe money on the house you are living in, DEFINITELY pay that off as quickly as possible. You don't get any tax deduction on interest payments on your own house. You do on an investment property.

And you don't get a tax deduction on paying off capital on your investment property.

I know this is just what Rolf said- I've just added a little bit.