32. Couple. Leveraged for 3rd mortgage?

Good point Mrs Vimes.

Delinking from my original post, Brendan, in terms of investments I am going to explore the numbers assuming the choice is upsize or invest in the markets as opposed to a BTL. The principles are similar with BTLs and stocks being taxed, so your tables are useful, and I will do some spreadsheets. Thank you.

I basically want to establish the difference in profit/loss after, say, 15 years between borrowing for a bigger home and investing in the stock market. I would like to sense check assumptions of mortgage at 2.8% interest, property increase 3.5%, markets increase 5.5%? What about fees related to funds? I am aware it is difficult to make any assumptions on property prices in a decade or so, but ultimately need to use a number

The answer is very simple.

You should not borrow money to invest in shares. End of story.

While you have a mortgage on your home, you should not have shares. If you do, it means that you are borrowing to invest.

Pay off your mortgage. Then you can afford the potential downsides of investing in shares.

Brendan

Agree Brendan, what if the choice is take out a bigger mortgage for a bigger house or buy shares?

You don't buy shares with a mortgage?

If you want to buy a bigger house with a mortgage, that is fine.

Brendan

presidenttttt said:

How do I assess the benefits of upsizing using banks money to invest in PPR, versus simple putting the same deposit into the stock market/index fund?

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Maybe I'm not quite reading your question right, but it seems you're asking how and where to keep funds in a way that you might use to up-size your PPR at some stage.

Park the tax question for a second and think about investment performance. If you want to upsize your PPR in 3-10 years then it is best to keep your wealth in a similar asset class like property nearby as prices will track each other very closely.

If that's your objective then it makes more sense to have a second property in Ireland than abroad. Property price performance can diverge a lot across markets.

Please note: tax and interest rates complicate this analysis of course and may even completely overturn it, but use it as a starting point.

Brendan Burgess said:

While you have a mortgage on your home, you should not have shares. If you do, it means that you are borrowing to invest.

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I agree, with a caveat. Carrying a mortgage and buying equities as part of a pension can make sense as over the very long term the tax-free return should be better.

But holding equities outside a pension while carrying a mortgage makes no sense. There is too much investment risk and tax on the upside.