How we repay our mortgage accelerated
In my blogs, I take you on the adventure that my husband and I entered into about 1.5 to 2 years ago. We have categorized our finances completely differently, with the aim of getting more freedom in our lives. A big part of this freedom is accelerating the repayment of our mortgage. Why we do that and how, I'll tell you in this blog.My husband and I have been living for almost 3 years in a beautiful semi-detached village in the north of the country. When we bought this house, we went to the mortgage advisor, asking, “What can we borrow?” At that time, we wanted to know what we could borrow, just like most people. We were told a sum and went looking for a house. Now we were lucky that our house was not very expensive, because there was still a lot to be repaired. Fortunately, my husband is very handy, so we could do that ourselves.
Our mortgage was therefore easy to pay for us. We then paid €622, - in the month. A nice, reasonable amount, you might think. But when we went deeper into that, it turned out to be more than €400, - of that interest. Every month we paid €400, - for our mortgage! Just for the fact that we were allowed to borrow that money. When we saw that, I came to the conclusion pretty quickly that I didn't want to. I didn't want to pay €4800 a year to the bank, purely for the use of that money. And I didn't want the bank to own our house. I wanted it myself and I wanted it as soon as possible.
And so we decided we were gonna start paying off. Every month as much as possible. We are allowed to repay €14250, - per loan part (we have 2) per year and our goal was to repay at least one loan part per year. And so we started, first with a repayment of €1000, -. And that was fun! You will immediately receive a letter from your bank, informing you that your monthly amount will be reduced. So you see your financial space increase with each repayment.
Now I hear people thinking, yes, but you still get free money from the government as a mortgage interest deduction. Why wouldn't you take the maximum advantage of that? Well, that's very simple: you don't get 100% of the interest rate reimbursed by the government. You get a deduction, which at best is once 43%. Which means you still pay 57% yourself. While, if I pay off, I pay 0% more interest. And so that became our plan. Get rid of the mortgage as soon as possible.
Meanwhile, we are a while further and this month we received the announcement from the bank that our new monthly amount is €500, - per month. That means that in that time we reduced our monthly mortgage charges by €122, -. And so every month! The great thing is, this difference goes to our redemption every month. We pretend that the monthly amount has not fallen. Every time the monthly amount drops by €4, -, we throw up the repayment amount by €4, -. That way you won't get used to the bigger financial space and there's no temptation to spend the money.
But then, of course, the question: how? Well, that was purely a matter of making other choices. Every time I stand in the store and want to buy something, I wonder how much it's worth to me. Do I prefer a dress or do I prefer financial freedom in the long term? Do we prefer convenience and do not change, or do we choose another health insurance company that saves €30, - in the month? Do I prefer to buy what I want in the supermarket, or do I stick to my list so I have money left at the end of the month? You make those choices day in, day out. And we now see the greater goal as much more important than the smaller happiness. Because, as I always say to my seven-year-old son: 'You only get happy from buying something new, because your brain then briefly creates a fine substance. That dust goes away again, the feeling of happiness in most cases goes away, but your money is gone as well. ' #personalfinance #hypotheek #aflossen #vrijheid #besparen
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