Hi just wondering if someone could pleas tell me if below scenario makes sense and if it is worth prepaying interest this year given:
2014/2015 Gross income -$230k. Net - $210k.
(47% tax bracket includes budget repair levy).
2015/2016 expected income - $160k (37% tax bracket)
$1.2 million in various IP loans all variable at 4.53% so roughly 55k a year interest only.
So if I could prepay $30k in interest for next year before end of June then it would bring me back down to $180k net and I would potentially save 14k in tax. Is this correct? Worthwhile doing?
Does that also mean I have to fix a proportion of my loans to achieve a 30k prepayment? And that it is not an easy process to revert back to variable as it would just be a once off?
Cheers,
Dooby
Prepay interest worth doing in this case?
2014/2015 Gross income -$230k. Net - $210k.
(47% tax bracket includes budget repair levy).
2015/2016 expected income - $160k (37% tax bracket)
$1.2 million in various IP loans all variable at 4.53% so roughly 55k a year interest only.
So if I could prepay $30k in interest for next year before end of June then it would bring me back down to $180k net and I would potentially save 14k in tax. Is this correct? Worthwhile doing?
Does that also mean I have to fix a proportion of my loans to achieve a 30k prepayment? And that it is not an easy process to revert back to variable as it would just be a once off?
Cheers,
Dooby
