Maximizing the mortgage interest deductions for the rental property
Background: We live in a townhouse (mortgage = $400,000) and we also have a rental condominium unit (mortgage = $200,000).
Last week, I walked into the bank because my mortgage is up for renewal next month. Bank rep asked why don't I obtain a larger mortgage or get a product with a secured line of credit at prime+0.5% for the rental property...(say $200,000 + $50,000) and then use the extra money towards paying off the primary residence. She claimed this strategy is used by many clients because the mortgage interest of a rental property is tax deductible.
I can see the benefits but is anyone doing this? Is this justifiable?
Last week, I walked into the bank because my mortgage is up for renewal next month. Bank rep asked why don't I obtain a larger mortgage or get a product with a secured line of credit at prime+0.5% for the rental property...(say $200,000 + $50,000) and then use the extra money towards paying off the primary residence. She claimed this strategy is used by many clients because the mortgage interest of a rental property is tax deductible.
I can see the benefits but is anyone doing this? Is this justifiable?