Your accountant might advise you to take out as large a mortgage as possible because the interest is tax-deductible. However, even though it's deductible, mortgage interest still has to be paid, and payments on a large mortgage could leave you short of cash that you'll need for other things. You could even lose your house if you suffer a financial setback or emergency and find yourself unable to make the steeper mortgage payments, just because that interest is deductible.
Some people take out extra mortgage money and plan to save or invest it elsewhere, but the interest paid on a mortgage is usually greater than what you could earn on personal savings, a gap that can eat up most of, or all of the mortgage's deductibility advantage. And it's not worth risking a bigger mortgage in the hopes of using the borrowed money to earn more elsewhere.
And be careful of falling into the old "pay off the credit cards with the extra money" trap. Unless you are completely disciplined NOT to use those cards and run up the debt again, you could lose your house when the credit card bills can't be paid because you took out that bigger mortgage.
Only bite off what you can easily chew and don't let an accountant put you at risk of losing your house later!
Published by Pickard Group