Hi there, I'm trying to work out whether it's in my interests to pre-pay my margin loan in June or to capitalise it. I am not really sure what to choose so I was hoping the Invested members could help me out. Let me throw in some numbers: Portfolio value - 915 000. Loan - 500 000. Loan cost at 7.5% prepaid: 37500 Loan cost at 8% capitalised: 40000 (plus future interest on interest). Now, people say it's best to pre-pay when you have a large taxable income to offset it against. I don't have any negatively geared property, all I have is a taxable PAYE income of $115 000 and distributions from the portfolio crudely estimated to be about $40 000. I do like the idea of dropping that $155k in taxable income down to about $120k. I do have the $37 500 in a bank account so I can pre-pay without selling down, but all things being even I really really like the idea of capitalising forever and not ever really paying back the interest Anyone have recommendations otherwise I'll just be flipping a coin! And also, my accountant is Nick M. Nick if you're reading this, are you comfortable with capitalised interest on interest being tax deductible?