Debts to reward you with mortgage

By the government, consumers are discouraged from consumer debt to cover. The complaints about borrow money to meet strict requirements, because they may not encourage borrowing. In commercials should be emphasized that borrow money. The mortgage does not fit into this thinking. The tax treatment of mortgage interest, homeowners are encouraged to keep up the mortgage debt.

 

Why is the mortgage introduced?

To buy a house to encourage, in the past, the mortgage was created. About 60 percent of the families currently live in a house sale, the encouragement thus has worked. The deduction is now kept alive to prevent homeowners their mortgage can no longer muster.

 

How does the mortgage interest deduction?

When buying a house that will serve as a main residence, the cost to finance the purchase and maintenance tax deductible. Someone who buys a house with its own resources has no tax advantage, there must be lent to the government grant to get more. The result is that homeowners do not own money in the house go stabbing, but that they needed the money for the purchase, renovation and maintenance to borrow.

 

Mortgage interest is incitement to borrow

The tax treatment of mortgage interest is not logical. You need a loan to the reward in the form of mortgage interest deduction can get. It sounds logical to the very people who will not lend their own home to reward.

 

Mortgage interest is especially attractive for the rich with expensive houses

The tax treatment of mortgage has no maximum. The paid mortgage rate for a mortgage of one hundred thousand euro is deductible, and a mortgage of four million, the same attractive tax regime. The high earners can deduct the mortgage interest even at the highest tax rate of 52 percent.

 

Restrict mortgage

In the long term is the unlimited mortgage interest untenable. It costs too much money to maintain complete control. Fearing the consequences of limiting the deduction, there are never in the past measures. Namely a restriction may result in the housing market will completely collapse. The effects are largely dependent on the extent to which restrictions will be implemented. There will probably be no heavy restrictions are enforced in the first instance.

 

Relaying stimulate

It would be better to just cancel the debts will be encouraged instead of holding debt. In this way the one-off cost to the exchequer instead of returning deductible expenses. The homeowners have also benefited, because the maintenance of the maximum mortgage debt will also take risks with them. Homeowners should have their maximum mortgage off to better withstand drop in house prices.  Get your loan now!  Contact Us