Pay off mortgage Vs buy another property

skidder652003

Hi
Can anybody advise. If you were give 100k, would you pay off your existing 58k mortgage @5.19%, which works out at £386 per month for the next 20 yrs OR would you keep that going and buy another buy to let property that was mortgage free, with a return of say £600 per month, before tax?? Any sensible advice would be appreciated.

Hippychick

Personally if I were in your shoes I would pay off my own existing mortgage and be safe and secure in the knowledge that no one could ever take my home away from me.

I would crunch some figures but you could put the remaining 42k down as a deposit on a BTL and get a small mortgage on that property.

tizhimi

I would second what hippychick said, but then again £386 isn't alot a month is it?

If it was me, I'd get rid of the mortgage so I felt safe and then maybe invest the 42k or, like hippychick said, maybe get a BTL.

dimbo61

Becoming a landlord is not that easy
If you can buy a property for £100k and rent it out for £600 a month you are doing very well.
Dont forget all the problems that come with renting and the costs!

skidder652003

Hi Thanks for all your replies. Can I just say that this would be paying off our mortgage on our secondhome. We are in a very lucky position in having already paid off our home mortgage. So this would be our third property that we are thinking of buying. In a tizz as I don't know if it is financially better to pay off 1st mortgage or buy 3rd outright.

dimbo61

BTL mortgages are more expensive than residential mortgages and also have a big fee in most cases
Check out the Mail online ( type in mortgage rates )
If you can get a good return for your £100,000 of £600 a month use this to overpay your existing mortgage. GOOD LUCK