Those 15 - year mortgage rates look awfully tempting, but the two arguments people keep making against are that I'll have better cash flow with the lower payments on a 30 - year, and that a longer mortgage lets me take
advantage of the interest deduction for twice as many years.
The
end of interest deductions on loans promises to pit Wall Street against the private equity industry, which has not been promised the same special treatment as banks.
Such a incentive to borrow may be undesirable, which is why the 2005 Tax Reform Panel recommended accompanying full expensing with the
elimination of the interest deduction (Howard Gleckman of the Tax Policy Center recently explained this point in more detail).
Total of Interest Deductions: This is the calculated amount of money you will «receive» in the form of tax deductions if you purchase a home.
Depending on how the tax reform is structured (assuming it passes), Lockheed could find itself with a gradually phased in lower corporate tax rate (won't drop to 20 % until 2022) that is more than offset by a potentially immediate
loss of interest deduction.
The House bill would allow for properties to be depreciated over a 27.5 - year term, while the Senate bill would allow for a 25 - year period,
absent of interest deductions.
My view is that if you invested in bonds that had an equivalent post-tax interest rate as your mortgage rate (less the tax advantages
of interest deductions), then it does not really matter if you pay off the house or invest in bonds because investing in bonds (at the same rate) will grow to the amount needed to pay off the house when it would have been paid off with accelerated house payment.
So, if you take out a mortgage of less than $ 750,000 after December 14, 2017, or if your mortgage is more than $ 750,000 but you took it out before that date, you won't lose
any of your interest deduction.