Hello there,
I have been watching this group for a while and it appears to be great. I have then decided to start being active in it - not only from the "asking" side but also from the "answering" side.
Question for a kick-off: Assume I have a mortgage which charges me %5.25 interest annually, out of which %80 is tax-deductible (I live in Canada; unlike the USA, mortgage interest isn't tax-deductible here, however I rent-out a big portion of my property).
Suppose I have the possibility of getting a significant loan for a much lower rate (about %2).
Would it make sense to take that chunk of money, put it as a lump-sum on my mortgage, and then pay-off the other loan? In essence, interest payment to the mortgagor would significantly decrease.
At first glance it seems ideal. However, the %2 loan isn't tax deductible at all. I'm not sure if it matters, and I haven't got around yet to figure out the mathematics of it all. I was wondering whether any of you has been presented with such a possibility before.
Ideas?
Isaac