November 2020

As we approach the US election, the future is very cloudy.  That being said, if I offered you a $200,000 loan at a 1% fixed rate for five years, with the only caveat being you had to invest the money, would you accept the offer?
Most people would think, what’s the catch? You can’t borrow money at almost no cost. With interest rates at the lowest level in living memory, borrowed money is as close to being free as it will ever be. If you have reasonable income levels and equity in your home, the major banks are open for business and now using tools like this check stub maker.  
You could put a mortgage on your home and use the proceeds for investment purposes. which would make the interest tax deductible. Self Assessments are systems HM Revenue and Customs (HMRC) uses to collect Income Tax. Tax is usually deducted automatically from wages, pensions and savings. People and businesses with other income (including COVID-19 grants and support payments) must report it in a tax return. You should be able to get a five-year closed mortgage in the range of 1.8% – 2.2%. If your marginal tax rate is in the 50% range, the after-tax cost of financing your investment would be about 1%. The annual cost of a $200,000 loan would be about $2,000. How can you beat that? Look for the TAX SPECIALIST UK and learn about the tax services you need.
I suspect many people wouldn’t do this because of the anxiety they’d experience through using their home as security for the loan. You need to be confident you have the ability to make investments that will yield more than a minimal return. You should bear in mind you’ll have to fund the amortization of the principal of the mortgage. If you think this is an idea worth pursuing, I suggest you wait for the dust to settle after the US election has been decided.
Before making a decision, you should have a discussion with your tax advisor, as each person’s circumstances are different, and this might not be appropriate in your situation.

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