This week the husband and I…no actually all credits go to the husband…calculated different scenarios for our mortgage. We paid off the interest-only part of our mortgage, yay! Now, we’re stuck with the savings mortgage which comes with a lot of weird tax rules. There’s this bandwidth we need to abide by, or else we lose all our tax breaks. We’d have to pay 52% income tax on all interest received if we start paying that thing off. That could amount to tens of thousands of euros. The husband calculated different scenarios and the conclusion is that we should stick with the mortgage as it is. It’s now set at 26 years, so that’s another 23 years because we’re 3 years into it. However, 7 years from now we’ll have to negotiate a new interest rate. At that point in time we could (and will) make sure that we can lower the amount of years to 20 plus 1 month in total (we won’t be in trouble if we abide by the 20 year rule). Ugh…another 17 years of paying a mortgage.
This type of mortgage was founded in 2008 and five years later these type of mortgages can’t even be offered anymore. It’s difficult to explain, you’d have to really know our weird system. Anyways, this type of mortgage and the bandwidth are a burden for our government as well. They’re investigating getting rid of this bandwith. I can’t see any disadvantages for our government and neither can the researchers who performed an impact assessment, so I hope the politicians come through. In that case, we’ll start paying off or throwing lots of money into the savings bit as much as we can. Depends on whether they’ll think of some extra limitations. I really hope that they’ll decide to get rid of this bandwidth within the next year or so. Until then…we’re ‘stashing (saving and index investing)!