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I am in the process of buying a house. The total price of the house is £185,000. I have got a £70,000 deposit, which would mean I take out a mortgage of £115,000. I also have £23,000 invested in to the S&P500. My question is, am I better off increasing my deposit by adding this £23,000, or leaving it in my stocks and shares ISA, letting it grow?

Any guidance would be greatly appreciated.

Thanks

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    Could you add the expected interest rate for your mortgage and your expected rate of return for your investments? The maximum mortgage payment you could comfortably afford is also relevant.
    – Tashus
    Commented Sep 23 at 16:04
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    Why are you considering this? What are your tradeoffs? In addition to what @Tashus mentioned you should also consider how much emergency funds you have (general advice is to have about half a year worth of expenses), you don't want to not have any liquid net worth at all.
    – littleadv
    Commented Sep 23 at 16:57

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Much depends upon your situation and as such this advice is kind of generic and loaded with contingencies.

If you had a healthy and secure income; and, you could gather the full 185K, I would buy it in cash. This would avoid a lot of costs with having a mortgage. However, by your numbers you are off by 47k. Sizable, but surprisingly close.

Given that you have to take a mortgage I might advise to put less down (maybe like 100K) and put 15K in a high yield savings account as an emergency fund. This would be especially true if your income is not as certain or you are a first time homeowner.

If repairs or updates are "needed", I might hold more back than the 15K previously cited from the down payment and use that money for those repairs/updates.

In general I would tend to leave the 23K in the S&P500 fund as its sale would tend to generate a largish tax bill depending upon your profit.

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    I would say the healthier and more secure the income, the more beneficial to take on a mortgage [deferring taxes on sale of investments + prioritizing long-term investing rather than interest cost reduction]. Not always safe / the right thing, of course, depending on a person's risk tolerance.
    – Grade 'Eh' Bacon
    Commented Sep 24 at 19:53
  • The money is described as being in a stocks and shares ISA so there would be no tax bill. In theory taking money out of an ISA means you are losing out on a tax-free allowance you could use in future, but since you can add £20K/year , this is not really a big issue here.
    – Ganesh Sittampalam ♦
    Commented Oct 24 at 17:32

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