Originally posted by Paul34
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Take a longer term, pay less P - make the loan term long or short enough that the outgoings (including P) match the incomings (rent) after you provide for tax.
I did recognise the tax component but I negate it - I pay IO loans and use all the spare cash (after tax, including any refund) to pay down the loan. The amount varies year by year depending on maintenance etc.
Maybe this is the 3rd option - has worked well for me over the last few years.
I find this approach works well because it also recognises that the income increases as time moves on (rent increases) whereas a standard P&I loan type structure doesn't recognise this - you would have to make voluntary P repayments which sort of negates the structure anyway.
So I just approached it with a simple desire - get the properties to pay themselves off as soon as possible.
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