Direct amortization
– reduce debt
A mortgage can usually be amortized directly or indirectly. What does that mean?
A mortgage can usually be amortized directly or indirectly. What does that mean? With direct amortization, the mortgage debt decreases from year to year. However, this also reduces the debt interest you can deduct from your taxable income. As a result, this will increase your tax bill. However, direct amortization is a solution if the mortgage is weighing you down.
Indirect amortization:
– Save TAxes
Indirect amortization and payments into your Pillar 3a are more effective ways to save taxes. Why? Because you can reduce your taxable income by paying into pillar 3a.
At the same time, they serve as collateral for your lender and keep your mortgage rates stable. You can also fully deduct your mortgage interest from your taxable income, lowering your tax bill.
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