If we have an interest only loan, do we get more of a tax break?

Answer 1

The structure of the loan does not make any difference to the tax position. If the loan is for a qualifying purpose then the amount of interest paid will qualify for tax relief, effectively reducing the rate of interest you are paying.

A business loan or a mortgage for buying a property which is let would be examples of qualifying loans.

But regardless of the tax relief you will still pay more interest on an interest only loan than you would on a straight repayment one.

Answer 2

If the loan is a mortgage, yes. You will get a greater interest deduction if you itemize.