A common problem that I come across with people that have borrowed money to buy an investment property and also have a home loan is the way that they view these debts. There is a big difference between the interest on tax deductible and non tax deductible debt in that the first (which is generally referred to as investment debt) can be claimed as a tax deduction whilst the second (which is generally referred to as personal debt) can’t be. See Note (1). What’s important here is that you need to be aware of the true cost of the interest

Changing the way that you repay your home loan can make a difference to how quickly your loan is repaid. Most people are paid weekly or fortnightly and budget accordingly. The amount required to be set aside for electricity, phone bills and council rates – to name a few – are converted back to a per week or per fortnight amount so that people know how much they need each pay. The same applies to loan repayments. People get their monthly repayment amount and then convert it to the amount that they have to put aside each pay. For example

Just how you manage your debt is no secret thanks to credit history files, so it pays to keep your file in shipshape order if you want success in buying property. Have you ever borrowed money for a car, owned a credit card, or forgot to pay your phone bill on time? Were you aware that all of this is kept in a credit file accessible to any financial institution – with your consent? If entering the property market is your aspiration, then it pays to understand how your credit history is recorded and just how it can influence your