Tuesday 29 May 2012

Maybe debt isn't so bad after all

One of the most discussed issues in financing recently has been the difference between "good debt" and "bad debt." It has been reported that Canadians' debt-to-income ratio is hovering around the 150% point, making financial analysts nervous. This article from the Financial Post gives some relevant examples of what constitutes "good debt" and how Canadians can use it to their advantage.

Unlike citizens of the United States, Canadians are unable to write off mortgage interest on their taxes. Still, there are methods Canadians can easily use to translate debt into profit. One example is the Tax Deductible Mortgage Plan, which converts a regular mortgage to an investment loan. This article also explores the benefits of using a line of credit to invest in capital markets. This is also classified as a "good debt," as the interest is tax deductible.

It is important to remember that the ability to borrow can improve an individual's financial situation, if used responsibly. Applying for a credit card will build credit history, a student loan can allow for a higher paying job, and a mortgage gives Canadians the chance to invest in their future.

For more information, or to find out if a Tax Deductible Mortgage is right for you, contact a qualified Mortgage Broker.

To read the full article from the Financial Post, click here.

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