mortgage-interest

Vocabulary Word

Definition

Mortgage-interest is the charge on top of the loan you get from the bank to buy a property. It's a percentage of the loan amount and it's how banks make money from lending you money.

Examples in Different Contexts

In tax planning, 'mortgage interest' is often deductible, meaning it can be subtracted from your taxable income. A tax consultant might explain, 'Claiming your mortgage interest deduction can significantly reduce your tax liability for the year.'

Practice Scenarios

Tax

Scenario:

Home ownership comes with some significant tax advantages. You should keep track of all your related expenses.

Response:

Would the tax deduction on mortgage-interest offset the high cost of the house to some extent?

Finance

Scenario:

Before you commit to any big purchase, it's important to make a comprehensive budget. You want to be sure you can handle the payoff over the long term.

Response:

What would be the monthly mortgage-interest I would have to pay as per the current lending rates?