Answer to Question #54145 in Accounting for Jack Connard

Question

Is it better to pay mortgage interest or have no mortgage for income tax purposes?

Answer 1

It is better to have no mortgages not to pay additional payments or to have mortgage interest deduction.
A home mortgage interest deduction allows taxpayers who own their homes to reduce their taxable income by the amount of interest paid on the loan which is secured by their principal residence (or, sometimes, a second home). Most developed countries do not allow a deduction for interest on personal loans, so countries that allow a home mortgage interest deduction have created an exception to those rules. The Netherlands, Switzerland, and the United States each allow the deduction. In Belgium, Ireland and Sweden, only a minor part of mortgage interest is deductible.