08 Jun 2021

Can I Buy a House Without a Mortgage?

Yes, you can buy a house without a mortgage. Purchasing a home using cash can be beneficial in some situations and make sense for people with high incomes. However, before buying a house outright with cash, it is crucial to understand the pros and cons to avoid potential problems in the future.


Pros of buying a house with cash

If you are in a situation where you are financially stable and have disposable income, you may benefit from buying a home with cash. Buying a house outright provides you with the following benefits:

  • You’ll have no debt. Mortgages are the most significant debt amount people have and loan repayments can eat up a massive chunk of your monthly budget. Instead of making loan repayments, you can use that money to save or invest. 
  • You’ll have instant equity, which is helpful if you have financial troubles in the future. You can access the equity in your home when you need it by applying for a line of credit or equity loan to cover bills later on. 
  • You don’t have to worry about losing your home. With no mortgage, you don’t have the risk of the bank selling your home if you can’t make repayments because you lose your job or are in a challenging financial situation, giving you one less thing you need to stress about.


Cons of buying a house with cash

While buying a house with cash sounds attractive, there are some disadvantages you should be aware of:

  • You won’t have access to your home’s liquidity. If you ever have a financial emergency or need extra funds, you can’t use your home’s assets. Home equity loans are an option, but these have fees, interest and borrowing limits. 
  • Your return on the property will be lower. 
  • Your assets will be tied to your home. If you used all of your savings to buy your home, you can’t diversify your investments and assets, which could cause you to lose money if your home depreciates.


Before buying a home with cash, you should consult a mortgage broker. Our brokers at Mortgage House are experienced and understand the pros and cons of purchasing a home outright.


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