Mortgage free - are there any disadvantages ?? 28 April 2020 at 12:56PM in Mortgage-free wannabe 8 replies 181 views

DoshOwl

Hello,
 Just wondering if there are any disadvantages (f.e. higher tax ??) at all to being completely mortgage free ? 
Many thanks in advance for your responses and stay safe !
 

EimearF

No, the only disadvantage is the loss of liquid cash, so make sure you have decent savings before starting to pay down your mortgage. 

Unicorn_cottage

There will always be the debate that money spent on overpayments should be invested instead in order to make your money work harder. That only works though if your investments go well.

Not sure what you mean by higher tax?

Tropically

No. I can't see any downside except liquidity. But I also think being mortgage free would save money each month and generate liquidity.

DoshOwl

@Unicorn_cottage: I thought I'd heard that there might be some kind of tax you'll have to pay when you're mortgage free, but could be nonsense as well ...! 

[Deleted User]

That would be a really weird tax...

longway2go

No downside to it really but if you are not investing in ISAs and Pensions because of it you loose some tax benefits that way. 

Couldsavemore

My parents can remember a time were you got a bit of tax relief if you were paying off a mortgage... thats long gone...

A_Frayed_Knot

I can think of one, but only if you are of a certain age, where it might be a problem to get another mortgage.

Explanation is, if you wanted an extension built or even buy a Buy to let property, you could add to your mortgage when you still had one, if MF then you would need to apply again, then if you are of a certain age, may not get the length/term you would like.