Mortgage or Paying Cash- Which is The Better Option For Your Home Purchase?

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We all dream of owning beautiful property once we reach a certain point in life. Having a home with your name attached, whether it’s a plot, an apartment, condo or bungalow is seen as a status symbol. Not just that, but owning a property can be an excellent source of passive income should you decide to rent out the house.


However, choosing whether to purchase the property using cash or to secure a mortgage can be a hard task, particularly if this is your first time and do not know which is the better option for your situation. You might have saved enough to purchase a home, but then you do not want to go broke after taking that route. Or perhaps you want to obtain a home loan, but are not certain whether you will be able to cover the payments during the agreed-upon period with the lender. It is important to look at both routes thoroughly and obtain financial advice if possible as it is a big decision to make.


Both cash and mortgage financing options have their pros and cons. Knowing what works best for you is the only way to get what you’re looking for. In this read, is going to how us the advantages of both cash and mortgage financing with the aim of helping you weigh the options and make a smart decision.

The Pros of Buying a Home With Cash

There are numerous reasons why you should consider making a cash purchase for your next property.

Sense of Security

Since you won’t have mortgage payments to cover, you can relax in your new home knowing that you do not have any debt to settle with a financial institution. You will not have to worry about interest rates that go up and down as the market fluctuates or the monthly payments. Another benefit to paying with cash is that you don’t have to worry about foreclosure if you are unable to pay off your mortgage.

Enjoy Discounts

Realtors and real estate agents like it when you pay for a home using cash as it’s ready money that they can see. Cash is king in the real estate business and so, you can expect to get the property at a discounted rate.

Ease of Title Transfer

If you find yourself in an emergency and need quick cash or you just want to sell your home fast, you can easily transfer your title deed or sell the property without the hurdles of an underlying loan.

The Cons of Purchasing a Home Using Cash

You Lose the Opportunity to Invest Elsewhere

If you can be able to buy a house using cash, the possibility of securing a mortgage loan is high. When you secure the home loan, you can then invest your money into ventures that will make you even more money. However, if you decide to purchase your home using cash, you might lose the opportunity to invest in other businesses that can bring huge returns in the future.

Loss of Liquidity

There is no denying that paying all cash upfront will leave a hole in your pocket for a while. As such, it is imperative to ensure that you have enough funds left in case of an emergency once you decide to be a cash home buyer. It is never easy to access the money tied to your property when you wish to sell it and that makes it hard to secure funds when in an emergency.

A Rise in Value of The Property Isn’t Guaranteed

The real estate market is very competitive nowadays and so, there’s no assurance that the value of your property will rise with time. If you ever decide to relocate and sell your property, you might be unable to find a good deal and forced to sell less than what you bought the house at.

Buying Property With a Mortgage

The next option you have when purchasing a house is through a mortgage loan. Keep in mind that this is a life changing decision and so, you need to think about it carefully. If you decide to take this route, it is important to take the time to understand the lending process to ensure you know what payments you’re expected to make and that you don’t find yourself in a situation where you are unable to make the required payments.

The Pros of Purchasing a Home through Mortgage


There are various mortgage plans to pick from with sensible interest rates depending on your situation. If you reach a point where you are not able to pay off the loan, the financial institution has a form of security (the property), which they can sell off to cover the debt.

Ease of Payment

Purchasing a home is certainly one of the biggest investments you’ll ever make in your life. However, doing so through mortgage makes it easier to purchase as you will do so through monthly payments. You’ll decide the monthly payments with the lender to ensure ease of payment.


Most aspiring homeowners panic when they see property prices. However, that should not kill your dream of owning a house. Since there are different payment options, securing a mortgage can help you secure your dream home whenever you want without having to worry about the hefty price.

The Cons of Purchasing a Home Through Mortgage Loans

Prolonged Debt

Let’s be honest, nobody likes the idea of debt. Securing a mortgage loan means that you’ll be in debt for a long period usually between 15 to 30 years depending on your situation. If you choose to make small monthly payments, then your loan repayment will be prolonged for years which can be daunting for some.

High-Interest Rates

Mortgage interest rates tend to fluctuate and can rise during the period you’re repaying the loan. The lack of consistency means that you might end up paying more than you borrowed. Also, since the mortgage is against your property, you need to ensure that you’re up to date with the payments to avoid home repossession. The thought of repossession can instill stress to many homeowners.

Added Fees

Apart from interest fees, there are others costs that you need to cover including legal, survey, insurance, penalty fees among others.


To conclude this read, the decision to purchase a house either through a mortgage or with cash ultimately depends on your preferences and situation. If you take the time to understand the process of owning a house, weigh the pros and cons of each option and then consult an advisor who knows the implications of these options, then you will certainly land on an option that is ideal for you.


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