Effective Interest Rate on Boat Loans
Effective Interest Rate: Interest rates on boat loans are at historical lows and many customers with boat loans can deduct the interest they pay on their boat loans on their tax returns, effectively reducing the amount of actual out of pocket interest expense. For more information on the deductibility of your interest paid on boat loans, customers should consult their tax advisor or can review IRS Publication 936 “Home Mortgage Interest Deduction”. This publication states “For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.” We recommend you consult your tax advisor to determine if your boat loan interest qualifies as a deduction.