Mortgage vs pay it off?

motiv4

I am sure there have been several threads on this already but i just cant seem to find the answer i am looking for.


I am planning to purchase a house in the near future, as an investment and put a tenant in.

I am in a position to pay for the property in full. (~120k)

But i am unsure what the best approach should be. Weather i mortgage the property or pay off in full.

I work full time, buying 2 properties would cause logistical problems as i would not be able to juggle work and house related things and could only realistically deal with one property at a time.

I am in a fortunate situation as i have a very reliable tenant who is planning to move into this property for the long term. So rental income is likely stable for 5+ years at least.

So.
cost of a mortgage over the 20-25 year term is ~50-60k.
So by paying in full i make a "return" of 50k instantly.

Though obviously i loose the opportunity to invest it and have it grow in another form.

Please correct me if my thinking is flawed.

I am planning on discussing with mortgage adviser soon over this same issue. But i feel both him and my financial adviser gain when i invest through them. And they will always want me to get a mortgage.

Appreciate any direction given.

dimbo61

You are thinking of buying a property which you are going to rent out so a Buy To Let property.
You can offset the interest you pay on a BTL MORTGAGE against the rental income you get when working out your TAX bill.
It,s a business and you need to speak to an accountant before buying outright.
Why would it be difficult to own a BTL property?
You really need to read up on the responsibility of being a Landlord