Our Mortgage…Three Years Later

Three years ago we took out our first (and hopefully last!) mortgage in order to buy the beautiful home which we now live in. It was built during 2010/2011 and in autumn 2011 we finally moved in. Even though we’ve had the mortgage for three years, lived in our home for a year and half now…we will own 25% of it by the end of this month.

Unfortunately, my husband doesn’t like me publishing the actual numbers. However, I will give you this number: €77.93. That’s the difference of the amount we pay our bank every month compared to May 2010. This number will increase over the next couple of months, because we are paying off the interest-only part of the mortgage. The savings part is a different story. We’re throwing money in the savings part, but that doesn’t decrease our debt…so that amount of interest stays the same. The number would have been bigger if we took out a total interest-only mortgage. At the time that sounded like a silly idea…now I wish we had because we are the kind of people who can make extra mortgage payments diligently. Well…it doesn’t make sense whining about that now.

Another fact about our mortgage: 30 years -> 26 years. We had the savings part of our mortgage lowered from 30 to 26 years because we made a huge deposit. So, even though the amount of interest doesn’t decrease, the amount of years we’re stuck with a mortgage has decreased.

Still, my dream is to pay off the whole damned thing within 10 years. As we’re 3 years in it should take us another 7 years. My husband doesn’t believe this will happen. It is safe to say that we can do this in 20 years…so that’s another 17 years of being a slave to the bank. 😦

When do you expect to have your mortgage paid off?

Love,

Mrs EconoWiser

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4 thoughts on “Our Mortgage…Three Years Later

  1. spaarolifantje

    I wonder whether / how you can break open the savings part of your mortgage. Refinance? Your husband may not agree with that yet, but who knows, maybe in the future.

    Reply
    1. econowiser Post author

      Seven years from now we could break free from it, but we would lose all our tax benefits i.e.: all the interest we received on that account during those ten years will be seen as income and will be charged with 52% taxes… We are going to calculate whether we would like to take this risk. If only they got rid of this fiscal clamp (15 years 35.000 or 20 years 150.000 per person tax free in savings) things would become so much easier!

      Reply
  2. Done by Forty

    Hi Mrs. Econowiser! My wife and I will be paying off the mortgage on our first home this year, but we lucked out to buy in 2010 when the market was down and we purchased a very modest home…and our loan doesn’t have any ramifications for paying it off early. I remember reading an earlier post of yours on the system where you live, and my takeaway was that I don’t really understand non-US mortgages. In your case, it seems there are costs associated with paying off a mortgage very quickly. Your plan to pay it off in 10 years will hopefully avoid that 52% tax rate and still allow you to avoid more interest payments than are necessary. Good luck!

    Reply
    1. econowiser Post author

      Hi there! Yes, we actually have an extremely weird system in which people who pay off their mortgage are actually punished with a fine by the bank or their tax breaks are taken away from them by the government. Congratulations on paying off your mortgage this year!!!

      Reply

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