That completely depends on your financial situation. When you pay cash you are often in a better bargaining position with the seller. If you need tax deductions, then a mortgage is the way to go. There are pros and cons for both. Cash - you've spent a big chunk of money but don't have any house payment. Mortgage you have a house payment and will spend many dollars in interest, but you've kept your cash for emergencies or other investments. Please talk to your financial advisor. - Tue Jun 23 2009, 07:18