You have a $400,000 mortgage at 10% with BILK Bank. In addition you have entered into an arrangement to lower the interest rate if you forgo the interest payments made on your deposits. The bank, naturally, pays 5% on deposits, however under the arrangement the interest you would have received is offset against your mortgage. How much interest, if any, will be assessable to you and why?

Answer rating: 100% (QA)

As the interest is committed to be paid and has therefore come in to you and you have the p... View the full answer