1st time Landlord with large cash lymp sum..advice needed

[StarskyJimmy]

here is my situtaion, I own a house valued at £215K, I currently have an outstanding mortgage on this house of £100K at 1.25% (0.75% over base rate for the term of the mortgage, 20 years left).

I earn £26K per year, and my wife earns about £18k (both before tax).

I have, in various savings accouts, about £95k

By the end of the year I will be in a position to either pay off my mortgage or buy a property(s) to rent out. My goal has always to pay off my mortgage, but with my excellant mortgage rate of 0.75% over base rate on my house, I am starting to think this would be foolish.

So my question is, should I just buy a small house for cash and rent it out?
or should i buy a number of houses using my cash sum for deposits?

Our joint income more or less covers are outgoings and lifestyle but would like to boost this a little with income from our properties, but on the whole, this would be viewed as a long term investment.
Any advice would be greatfully received...........

[jeffrey]

Who knows the future? But it's likely that interest rates will rise, at some point. Don't stretch your money too thinly.

[pinkwallpaper]

If you want to give being a LL a try you are in a good position re the money. Unfortunately you will not be able to claim tax relief on the mortgage interest on your own property but could if you borrow to buy a property. This means you will be paying tax on the profit you make on renting a house out. If you pay the 95K off of your mortgage could you then borrow money at a similar rate to buy a property for rent?
Read thread on repayment v interest only this may help.