Cheap mortgage-free flat vs house

steampowered

I would choose Option 2.

In an era of record low interest rates, it makes perfect sense to take an affordable mortgage.

_Peter_ wrote: »

1. Buying a flat for cash- around 300k and keep the rest in saving accounts and in some small investments (shares etc).
2. Buying a house with 5 year mortgage. The house price would be around 480k which means I would have to take 80k (probably 5 years) mortgage.
3. Buying the same flat for cash (300k) and then a second one for mortgage (100k is enough deposit to buy 300k flat). The second flat would be purely for investment (renting).

Option 4 is to buy a £300k property to live in, and put the rest into tax efficient investments such as a stocks & shares ISA or a pension.

If you are a higher rate tax payer, and you put money into a pension, that's an instant 40% from the taxman. Plus on average 6-8% per year in investment returns.

For higher rate tax payers, BTL should only be considered once you have maximized your pension contributions and S&S ISA allowance.

_Peter_

csgohan4 wrote: »

Welling can be a bit rough in my experience, but you need to go see for yourself

Could you elaborate on it please?