Hello guys, the beneficent New Zealand Government has changed the requirements for Non-NZ resident student loan holders.
It was the case that we used to have to pay 1/15 of our balance + interest a year which for us came to about $9000 (NZ)
Things have now been 'simplified' and we have to pay $5000 a year which basically just covers the interest with about $300 for principle left over.
However we also have the option of taking a three year repayment holiday which would mean no repayments for three years, but we would still of course be having the interest added to our loan.
I'm curious to see what others think we should do, whether we should take the holiday and plunge the extra money into paying off our houses or not.
I guess the relevant points of comparison is that the student loan interest rate is 6.9%, whereas the revolving credit portion of our mortgage is at 9.5% However of course the interest on our mortgage is tax deductible, whereas that on our student loan is not.
Not being resident for tax purposes of course in the short run mean that tax deductibility makes little difference to our actual cashflow, but if either we come back to NZ or our investments start to pay off significantly then that extra bit of tax deductability might be handy.
So what would you do?
It was the case that we used to have to pay 1/15 of our balance + interest a year which for us came to about $9000 (NZ)
Things have now been 'simplified' and we have to pay $5000 a year which basically just covers the interest with about $300 for principle left over.
However we also have the option of taking a three year repayment holiday which would mean no repayments for three years, but we would still of course be having the interest added to our loan.
I'm curious to see what others think we should do, whether we should take the holiday and plunge the extra money into paying off our houses or not.
I guess the relevant points of comparison is that the student loan interest rate is 6.9%, whereas the revolving credit portion of our mortgage is at 9.5% However of course the interest on our mortgage is tax deductible, whereas that on our student loan is not.
Not being resident for tax purposes of course in the short run mean that tax deductibility makes little difference to our actual cashflow, but if either we come back to NZ or our investments start to pay off significantly then that extra bit of tax deductability might be handy.
So what would you do?
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