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michael adams

No Mortgage on my own home - Decisions

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Hi there, So I have a fairly good sized portfolio but doesn't quite provide enough income for me to quit my job yet. My own residential home as no mortgage on it and worth ~400k. I have a Resi mortgage agreed on the property of 300k as I was planning on buying a run down bungalow near our house to then redevelop and move into. Then subsequently I could either rent out my current house or sell.

Essentially that renovation option fell through so I am now in a position where I could accept the mortgage and use the fund to extend my portfolio.


On one hand I am in a great position to be mortgage free but on the other hand I 'could' release funds to extend my portfolio and potentially reach my goal to give up my day job.


Just want to open this up to people's thoughts if I may.



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A bird in the hand Michael ;)


You MAY not be able to get the lending again in the future and interest rates will only go in one direction.


Sure, you will need to find a new project, but there are lots out there. In the meantime, you will have to service the mortgage, but with some sensible diversification, should be able to at least cover the interest costs on short-term deposit.


This is not financial advice and does not take any account of your risk profile either...




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While richard makes sense, I am in a similar position but, on balance and from a risk perspective, i kept my home mortgage free and started to work on joint ventures to make some cash for the next investment. Also depends on where you are in terms of strategy as I am looking short term to retirement rather than long term.

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You're general concept of borrow money (either from your own house, or BTL's) and then buy something, move into and realise the gains on your existing property is what I have done for the past few years. It does work, well, worked for me, but I am hands on and know where to get a good deal on materials / labour / legals ect. I also know what I'm doing from a development point of view, so, when I buy something the risk isn't great as I have multiple exit strategies if the market place changes.



It has meant I've moved in and around areas I perhaps would not ultimately choose to live full time, but the properties had growth in them. Most of the time a little extension a good quality refurb and always resold ( due to quality ) at the top price on the road. So, every 8-14 months I move house. The wife has been cool about it. You both have to read off the same page on that one, otherwise its hard.


I now after 4 or so years of this I live in a very nice house ( done by myself ) in a lovely location with no mortgage. 


The reason I was able to do this was also aided by the fact most of the time my property income has funded most of the development works. The funds to do the purchase was usually from a previous sale.


Please note, I do not have an extravagant lifestyle, I have not done various things (holidays, cars) ect that people do / aspire too and I am careful with my money. A small amount of pain now in your life makes your future much more comfortable.


Also, due to the recent tax changes, it's less advantageous raising funds from BTL and you'll prob. get a better rate on a personal mortgage. The only down side is due to cash flow and you prob. won't get an interest only mortgage on your residential mortgage.


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