Can I take out a mortgage/s against my property to help me buy other properties that I can then rent out?

Hello, I am thinking of paying off my mortgage in full by cashing in my stock market investments. If I do this can I take out a mortgage/s against my property to help me buy other properties that I can then rent out? Not sure how it all works in a practical sense and where to begin. Thanks

Hi Chris,

Thank you for your question.

Firstly, paying off your mortgage or continuing investing is a common dilemma. A way to look at this would be the difference between the interest you're paying on your mortgage vs the long-term gains on your stock market investments. In the current times of very low-interest rates, a well-diversified investment portfolio would have produced a higher return than the average interest charged on a mortgage. Based on these facts, investing would take the win. This will of course depend on how your funds are invested and the interest you're paying on your mortgage. Additionally, future stock market gains are not guaranteed.

That said, there is the psychological side of money which is huge - paying off your mortgage debt might feel incredibly satisfying. Therefore, choosing to pay off your mortgage might be the right decision based on the psychological gains.

In terms of remortgaging to purchase further properties etc, this is generally a 'Do Your Own Research' situation. There are no advisers in this space - at least not regulated advisers I am aware of. You should sit down and do the maths - specifically for the property including all costs & taxes. Often people overlook stamp duty, income tax, and property maintenance costs. You are also relying on having good tenants. Property investing isn't as profitable as it was in the past, but it can certainly produce a nice income and capital gain.

Hope that helps for now.

Oliver