Mortgage Interest Relief

C

Calico

Registered User
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432
Apologies if this is a stupid question - my head can't quite figure it out, but if for example you have enough capital to buy a house outright is it better to do this or take out a mortgage in order to avail of mortgage interest relief? And if so, what size mortgage & what kind of mortgage (i.e. interest only?) is the best to gain the optimum advantage in doing so.

I suppose, it's the same thing to ask what level of return on an alternative investment is needed to make the above worthwhile.
 
Are you talking about an investment property or a PPR? In general I doubt that it makes sense to borrow purely to avail of tax relief but as you say you'd need to crunch the numbers to check this assumption.
 
You are still paying interest on a mortgage regardless of the relief you get. You have to decide weather it is worthwile still having a lump sum in the bank while having a monthly outgoing on a mortgage or if it is worthwile being mortgage free and reducing your lumpsum.
 
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