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Buy a property outright or get a mortgage?

  • 15-12-2019 11:33am
    #1
    Registered Users Posts: 179 ✭✭ Bigboldworld


    A question for you folks, if you were in the fortunate position of being able to buy a property outright with cash would you do it or use some of the cash and get a mortgage for the rest? For this example see figures below

    Property worth 350k

    Max mortgage eligibility- 200k

    Savings - 400k

    What would you do in this scenario, if you bought outright you would have 50k left in savings, what would be the pros/cons of buying outright v getting mortgage and topping up with savings

    Thanks


Comments

  • Registered Users Posts: 686 ✭✭✭ spakman


    Is this just a brag?
    I dont see any advantage in taking out a mortgage that you have to pay interest on when you don't need to.


  • Registered Users Posts: 179 ✭✭ Bigboldworld


    spakman wrote: »
    Is this just a brag?
    I dont see any advantage in taking out a mortgage that you have to pay interest on when you don't need to.

    No honestly not a brag, a friend may be coming into an inheritance and it was to get thoughts on pros/cons of putting all of your money into a house or holding a lot back to have as security money etc


  • Registered Users Posts: 4,900 ✭✭✭ Bigus


    It’s not a simple question, as it would depend on persons tax status and income for mortgage interest relief and also what was going to happen to the liquid money , ie would it just be left in an account or invested in low risk or high risk products or bonds .

    But simply buying outright for cash would be much better than borrowing a mortgage and leaving the cash on deposit, no argument whatsoever. There’s also legal costs and admin cost in getting a mortgage and getting rid of it.

    Just because everyone else is unfortunate to have a mortgage is not good enough reason to have one too.


  • Registered Users Posts: 655 ✭✭✭ work


    A mortgage is the lowest rate loan SO if you don't want to do anything with the money other than put it into your home gp for it. Anything that could require a loan in future like a car loan, holiday, school fees or business development then a residential mortgage is the cheapest money. If none apply then of course buy for cash.
    I do not see any other angle on this.


  • Closed Accounts Posts: 40 Don Joe


    work wrote: »
    A mortgage is the lowest rate loan SO if you don't want to do anything with the money other than put it into your home gp for it. Anything that could require a loan in future like a car loan, holiday, school fees or business development then a residential mortgage is the cheapest money. If none apply then of course buy for cash.
    I do not see any other angle on this.

    Except you'll likely be paying a mortgage back a lot longer than a car loan.

    Buy the house outright, you said there'd still be cash left over. With no mortgage or rent there's no reason a working person can't grow the savings pot.


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  • Registered Users Posts: 22 ✭✭✭ Rose of Lima


    If the house would be for personal use, then buy outright. He would be dipping into his spare €50k a little to have his survey and legal fees done, at least.


  • Registered Users Posts: 1,302 ✭✭✭ Heebie


    If you believe you can invest the money well enough to make more interest than you will pay on the mortgage, then get the mortgage and invest the rest.
    If you want the security of having a paid-off house, then go for that.


  • Registered Users Posts: 11,195 ✭✭✭✭ Lex Luthor


    you could essentially burn into a lot of your 50k savings to furnish the house if you buy it outright for the 350k

    maybe mortgage 100k, 20k to furnish etc and rest as a nest egg maybe investing some of it


  • Closed Accounts Posts: 11,221 ✭✭✭✭ Zeke Great Ripper


    I would get out a mortgage and buy my first home with it, then with the remaining money, put it into an investment property and rent it out to students.


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