Hypotheek · Personal

Paying off (part of) our mortgage

It’s been a while (Dutch) since I lasted posted something unrelated to my stock buys, received dividend or my failing crypto currencies. As part of our journey to more freedom and financial independance I chronicle my DGI journey in generating monthly dividend income, but that’s not the entire story. Another part is me continuously improving our financial situation by optimizing our cash outflow. One large expense we have is our 30-year mortgage on our house.

When we bought our house in 2006 we split our mortgage into two separate parts; the largest portion is a “savings”-mortgage (spaar-hypotheek) and a smaller portion that’s essentially rent (aflosvrij) since you only pay the interest and not the principal.

The latter part of our mortgage consisted of no less than €68.000 euro. Meaning that at the end of our 30 years of mortgage, we would have payed €89.760 (bruto) in interest and still be €68.000 in debt! Talk about a money making machine for the bank / mortgage company!

Unfortunately, the first ten or something years of our mortgage I wasn’t as financially educated as I am now, so we didn’t do much in order to optimize the situation. When we began to look more seriously at our finances (and our salaries were starting to increase) we decided to see what we could do about the “rent”-part of our mortgage and we started to make additional payments to slowly lower the monthly interest and whittle down the principal.

That is until last friday 17th of September 2021. On this day we made our final payments and succesfully payed of that part of our mortgage! Going from paying €250,- of interest monthly to €0 was a long process, but we are so happy and proud that we made it!

Next step, investigating what we can do about the other part of our mortgage. To be continued!

9 thoughts on “Paying off (part of) our mortgage

  1. Congrats! What wad the interest? We have mortgage as well but with 1,65% interest, so it make no sense to pay it doen vs 3% dividend income. I have leasing with 2% interest and 50€/mo casco, that one is on my list. I think it would be good to pay it doen when ccar is 7y meaning in 2023, then I will still have few years left. Also student loan with small exposure. That one I think I will pay down in 2022

    Liked by 1 person

    1. We have a 4,4% mortgage rate. In rality this less since we can get a part of it back via taxes. Besides the money-aspect I also realy like the peace of mind it gives us knowing that this debt has been cleared.

      Like

  2. Good job Mr. Robot, and also nice that you write about your other financials than stocks. I do not know how long the spaarhypotheek runs, but now might be interesting to change to another mortgage type, if the fee is ok. If all ok then you have build up a savings part into it, so changing the type means you probably also have a much lower mortgage

    Liked by 1 person

    1. We did have an advisor who made some preliminary calculations, the first result was a very very hefty fee. Since we no longer have that much trust in that particular adviser we want to have someone else check it out as well.

      Hopefully we can make a change for the better.

      Like

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