Another Mortgage Conversation

Remember it would cost us €25.000 to change our mortgage. Well, we threw that offer in the bin. However, some banklady phoned and asked us whether we were still interested in a meeting to talk about our mortgage. I told her the fine was too big. She was shocked at this number and was sure something was wrong. She knew for sure she would be able to get us a better deal.

Today we had a meeting via Skype, very handy with two little ones in the house. This time around another bank employee calculated an €18.000 fine. Ehm…right. The interest rate for five years she was able to offer us was as low as 1.9%! Wonderful! Strange thing is that our monthly mortgage payment would go up a little, even though we now have a 4.35% deal. This is because we have this savings mortgage deal….difficult to explain to the non-Dutch. They’re not available anymore….but we’re stuck with one! (unless we move houses, that way we can get rid of it without the fine)

Oh wel….this means that we can’t use our excess money to throw into our mortgage. Our other options are (unless we want to spend it on useless shit…) to either save or invest. We’re all for the latter, yet again!

Lots of love,

Mrs EconoWiser

Investigation On Changing Our Mortgage

The hubby suddenly started talking about how low mortgage interest rates are at the moment and how we might benefit from that. We have this weird mortgage (bankspaarhypotheek) where we keep the debt in full in order to take full advantage of even weirder Dutch tax rules. Yeah, we get a lot of money back from the government. I don’t understand why they stick with the rule…because everybody who takes advantage of this rule is actually screwing the government. Probably some bank lobby dudes who made sure this rule was incorporated…because the banks also benefit from this rule.

Anyway, we looked at changing our mortgage to an annuity with the idea of paying the damn thing off within the next 5 to 10 years. (LOVE!!!)

Our fine with the Tax Man will be around €4.000. (Yes, the government will fine us for not wanting to screw them over anymore!)

We asked the bank to calculate our fine. Yes, we need to pay a fine, because we signed up for our current interest rate till 2020. We got a letter…ouch….€25.000 in total in order to undo this mortgage. Obviously, we have no choice but to stick with the weird mortgage. In 2020 we’ll be able to make another big deposit in the savings part and we’ll bring down the term to 2030. That means we’ll have paid off our mortgage in 20 years instead of 30. Less than 20 years will imply a huge tax fine by the government…yeah, they really really really want us to take advantage of a tax rule that screws them over…and over….and over each year.

Love,

Mrs EconoWiser

P.s. Voor de Nederlanders: let dus op met je bankspaarhypotheek. Daar zit een fiscale klem op en de gevolgen van veranderen zijn echt niet grappig! Wij snappen niet dat de overheid de fiscale klem niet gewoon laat vallen.

The February Numbers

February 2014
Mortgage: 31.36% (0.14% increase, interest on the savings part of the mortgage was paid out, we can’t make extra mortgage payments due to stupid tax rules)
Emergency fund: 306.1% (about 2% increase…we have started throwing more into index funds…but the emergency fund is still growing!)
Stash: 9.35% (0.2% closer to early retirment)
Income to spending ratio this month: 74% (as expected, not very impressive. the husband repaid his wintersport buddy the remainder for his holiday, we had professional pregger pictures taken, the hubby bought tickets for a music festival…besides the fact that we’re going to have a baby, nothing expensive will be happening to us in March 😉 )
Income to spending ratio this year: 76% (not a realistic number yet…, we’ll get to 60-65% by the end of this year!)

Ok, let’s put on our Money Mustache and make things happen in March!

Love,

Mrs EconoWiser

Last Month’s And Last Year’s Numbers

The husband is off to Austria. He’s on a rather expensive snowboarding holiday up to and including Sunday. So the only sensible thing for me to do after waving and kissing him goodbye was calculating last month’s and last year’s numbers, right? I’m such a geek these days! 😉

December 2013
Mortgage: 31.08% (0.07% increase, I continue to hate the fact that we can’t make extra mortgage payments anymore…)
Emergency fund: 248% (4% increase)
Stash: 8.47% (0.33% increase)
Income to spending ratio this month: 79% (NOT fair since the mortgage was already taken from our bank account on 31st December 😦 Without that early mortgage payment it would have been 64%…but now we won’t have a mortgage payment in January 2014…yay!)
Income to spending ratio this year: 65% (bang on the lower challenge I set!)

Mind you, this was the year in which we went to Austria three times to have fun in the snow. We also bought some bits and bobs for our house and we spent dough on getting things ready for the kid. We went to a couple of music festivals and we treated ourselves to a two month indoor skiing membership during the summer. (Yeah, we like the snow) We also paid off the interest-only part of our mortgage. Furthermore, we saved a lot on groceries and we hardly went out for dinner or squandered money in likewise forms. We didn’t feel deprived of anything at all. I am actually rather proud of the fact that this year we spent 65% of our income compared to last year’s 84%! It’s all about spending money more consciously.

Are you happy with your 2013 numbers?

Love,

Mrs EconoWiser

November Numbers

As today is the first of December the November numbers are in!

December 2013
Mortgage: 31.01% (I continue to hate the fact that we can’t make extra mortgage payments anymore…)
Emergency fund: 309.18% (187% increase! Thanks to the endowment.)
Stash: 8.14% (4% increase, almost at 1/10 of being FI!)
Income to spending ratio this month: 57% (verrrrrrrrry happy about this!)
Income to spending ratio this year: 63% (1% decrease, yay!)

The husband and myself high-fived over our income to spending ration of this month. We “only” spent 57% of our income (I didn’t add the endowment to the income). The “unexpected” spending went to changing to winter tyres, a board game festival, a donation to help out the Philippines, a couple of presents, new bathrobes, maternity underwear, a second-hand nursery for my parents so that the little one can stay the night there sometime in the future, other second-hand baby stuff, one lunch with a friend and uncovered health insurance expenses.

Without all of these “unexpected” expenses we would have stayed well under a 50% income to spending ratio. We are so getting better at this! If we’ll really be able to spend less than 50% of our take-home pay we’d be FI in sixteen years. Cool, I’ll be 48 by then. Our goal is to have this mortgage paid off by the time I’m 50…so our ‘stash by then should more than cover our expenses. Whoohooh!

How did you do last month?

Love,

Mrs EconoWiser

Asset Allocation Net Worth

According to jlcollinsnh we can totally add our home equity into our net worth asset allocation overview. So, I’ve been playing around with our asset allocation based on the numbers by the first of November 2013. The equity in our home is based on what we already paid off, so I am not working with whatever our house should be worth right now.

These are the numbers:

Cash: 21%
Home equity: 74%
Investments 5%

Obviously, I’ll need to create an overview of our asset allocation in terms of investments only as well. This is our net worth asset allocation, not our investment portfolio asset allocation. I’ll do that on 1 December. However, this overview shows (again) that we have too much ‘stash laying around and we should invest a huge chunk of it.

What does your net worth asset allocation look like?

Love,

Mrs EconoWiser

Buying A Home Is Now Cheaper Than Renting

According to this article buying a home in The Netherlands is now cheaper than renting one. For years it has been the case that renting was a lot cheaper over here. Especially renting via our organized rental housing system. It would take you a couple of years on the waiting list but if you were one of the lucky ones to actually be assigned one of these homes you’d spend a small amount of your income on rent each month. This is also why landlording in The Netherlands was never a very lucrative business. As a landlord you’d have to compete with the inexpensive rental housing system. All that has now changed, they say.

I never lived in a rental house that I got through the system. However, I lived in a very very very cheap house for ten years. It was supposed to get demolished, but that never happened. The owner didn’t take care of the building at all. He only helped us in emergencies, like when the roof leaked. After about three years my then boyfriend now husband came to live with me in that house. For all those ten years I/we paid €350 a month for a detached four bedroom home. That’s cheap as chips! That’s also why we were lucky enough to save a shitload of money.

Now, our mortgage is about four times that amount. But in the end, we’ll own this home. The last couple of months in the rental were very unhealthy. Mold got the better of the building.

How about rentals in your country?

Love,

Mrs EconoWiser

The Assocation That’s Supposed To Protect Buyer’s Rights Is Against Extra Mortgage Payments!

Here in The Netherlands we have an association that aims to protect and advise home owners. We’re members of the club.

I phoned them about their view on extra mortgage payments on our type of (savings) mortgage. And what do you know? They’re AGAINST the idea!!! Dutch readers of the blog can read it here.

They think that removing this restriction will cause weaker groups to change their mortgage in a way that’s not good for them. And there are a number of other bogus arguments.

So, for once, many politicians have had a great idea and would like people to make extra mortgage payments…but this association is against that?! Well, politicians never listen to advice…right?! Fingers crossed.

Love,

Mrs EconoWiser

I Like The Signals Coming From Politicians Concerning Mortgages

You guys know that we’re sort of stuck when it comes to our mortgage right now. We are unable to make extra mortgage payments due to weird tax rules and other stupid systems.

However, I have hope that things will be changed. This Tuesday our government will present new plans and they want to do something about the fact that the Dutch have way too much mortgage debt.

The things I picked up in the news recently:

• Banks should stop fining people for making extra mortgage payments. That’s right, in The Netherlands banks have these rules that you can only pay off 10% – 20% of your mortgage a year. That percentage differs per bank. In our case it’s 10% for our remaining mortgage. However, we can’t exercise that right because Uncle Sam conjured up a certain bandwidth for our type of mortgage.
• Our government carried out an impact assessment on letting go of this bandwidth and they couldn’t find any substantial arguments against letting it go. Kudos!
• Parents will be able to give each of their kids up to €100.000 tax free as long as they invest it in their house or mortgage. However, if they don’t tackle the bandwidth and bank fines it’s of no use. So this gives me hope that they will do something about the first two points.
• The European Parliament is in favour of giving people the opportunity to pay off their mortgages faster. This should be made easier all over the EU. And since the laws they pass are superior to a country’s laws…

So, we’ll just wait for our government to come to their senses and make the right choices. In the meantime, we’ll keep building our ‘stash and when the time comes (hopefully sooner than later) we’ll start slashing our mortgage debt again!

Love,

Mrs EconoWiser

Plans For A National Mortgage Bank

The Dutch government is making plans to create a national mortgage bank. In short, the idea is that Dutch retirement funds will invest in this bank and thus invest in The Netherlands. The government and the retirement funds are now negotiating the terms. The retirement funds wants the Dutch government to be responsible for a certain amount of risk. Ah…investing the “safe” way.

The government hopes to relieve a lot of Dutch banks from their huge mortgage pressure, or whatever.

Sound very promising. The banks will be happy, the retirement funds will be happy and the Dutch government will be happy. I just hope this turns out beneficial for the Dutch population.

Let’s wait and see…

Love,

Mrs EconoWiser