The Property Podcast ASK499: Should I pay off my mortgages? PLUS: Should I re-buy in a limited company?
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Oct 21, 2025 This week, a listener grapples with whether a surprise inheritance should go toward paying off her mortgages. The hosts explore the balance between debt reduction and long-term investment returns. Another homeowner wonders if he should keep his steady rental properties or transition them into a limited company; they discuss the importance of transaction costs and long-term asset appreciation. Plus, insights on estate planning and tax strategies to protect family wealth add an extra layer to the conversation.
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Compare Returns Before Clearing Debt
- Compare the expected return from investing the inheritance with the mortgage interest rate before paying off debt.
- Use whichever option yields the higher net return and also consider your comfort with leverage.
Leverage Is The Property Advantage
- Leverage is central to property investing because mortgages let you amplify returns over time.
- Paying off debt removes leverage and may reduce long-term portfolio growth potential.
Blend Debt Repayment With Investment
- Split the inheritance if you need both security and growth by paying down some debt and investing the rest.
- Avoid binary choices; balance financial optimisation with emotional comfort.