If you were in a position to pay off your Mortgage early would you do so, or would you carry on paying as normal for the duration of the Mortgage?
depends on how much i love the house.
If you have a capital sum to do this with there are a number of scenarios.
You will always pay more interest on the mortgage than you will get on your savings. If the monthly outgoings are small it may be better to carry on.
What penalties are payable if you finish the mortgage early? Sometimes it is best to wait until the end of the financial year to pay it off sometimes it makes no difference, it depends on the lender.
You need to make enquiries with the lender to work out what advantages or disadvantages there are.
I’ve checked with my Lender and i’m fortunate not to encur any penalties. Are you penalised by the Taxman for owning the property?
That depends mainly on what the property is worth and whether you intend to die any day soon.
I live in the golden triangle where house prices are ridiculous but due to death duties etc the tax man will grab about 40% of the value on our deaths.
The local authorities will sell it to pay for your care when you get old and they put you in a home! :a
Those that live in rented accommodation and piss thier income up the wall have no assets for the state to grab so as tax payers we fund them. (End of rant) :a
For the record this does not stop me from owning my own home, just hope to spend the equity before they do.
I would pay a huge part of it. The dutchies still have some tax benefits. We can get the rent back. So it’s not very beneficial to pay 100%, but leave a little debt.
Holy Sh*t i wasn’t thinking of death just yet…may have to leave it all to some worthwhile charity just to keep the Taxman away.
Correction, we can get a part of the interest back, depending on how much tax you pay.
Also, the reason why people never pay their home off in NL is because of the tax you need to pay then for owning a paid off house.
Also, don’t forget inflation. If you have a large cash sum now to pay off your mortgage, it might be better to keep it in your pocket. The cash you have now is much more worth to you now then the debt is in 30 years for instance.
Forget paying it off spend the money on wine, woman,and song.
Pay it off immeditately! Make payments to yourself not some bank. Your just throwing money away anytime you have interest fees. You can enjoy life much more with one less bill to cause stress. I’ve got a descent bank that doesn’t charge crazy fees for paying them off early. You already answered that so I would, but I don’t understand a tax penalty. I live in the States so it’s different I guess. You have to pay taxes no matter what here. If your buying or if you already own. I guess the only way of getting out it by renting but that’s really throwing money away. Just think of the money you would aquire every month without the morgtage payment. It’s gonna make your life easier no matter how you look at it.
But don’t forget that the tax he has to pay when he fully paid his mortgage off can be as high as his interest is. If That’s the case, he won’t win a thing…
I would pay it off early:
If it’s a second house that you are renting out to other people, then you may be negatively gearing a loan/mortgage on a house to minimise your personal tax payments - but the way everyone explains negative gearing, it seems like they are always throwing more money at it then they can ever get back from tax rorts, because you only get back less than 100% of your expenses & mortgage interest.
I have no idea what it’s like overseas, but here in Oz, you only pay taxes on profits, when you actually get the money.
There are local government fees (maintenance levies for roads, garbage collection & etc) that have to be paid by anyone that either owns a house, or is currently buying the house (in the case of renting occupants), but no other higher taxes (state or government) on the house if it is completely owned.
There is a “Capital Gains” tax which is charged when you sell a house, if the house was sold at more than it’s indexed value - ie: prices in a suburb increase much faster than inflation & you sell at the inflated price.
Yeah, I don’t understand the tax fees after you own a home. Extra taxes on top of property, and school taxes? ( Different here in the U.S. must be)I just can’t see how owning something is gonna cost ya more in the long run.
Wellll, welcome to the Netherlands I would say
Here we pay taxes on allmost everyting. We even pay taxes on the money we get from interest, if we buy a house we pay 6% tax on that (6% of the total value), we pay tax if we inherit something (25 to 40%) or win something in a lottery or by gambling (29%), we pay special car taxes (40%), our sales tax is 19% and our lowest income tax scale is 33,55% (up to 52%! depending on how high your income is), etc etc. You get the point.
I have also lived & worked in the USA in the past and I must say that your tax climeta is preferred
so, how much [I]did[/I] you win on the lottery then
@bjproc…Just some clever investments on my part.
I don’t believe that so many would pay off a mortgage. I could have paid mine off nearly 20 years ago and on average have made far more by investing than the cost of the debt. I know there are risks involved - I just can’t believe the lack of adventurous spirit here.
glad that they’ve paid off
i think i’d pay mine off, get the noose off from around my neck & stop the high intrest charges, but thats just my opinion.
@Bjproc …My Nan said to me years ago " Young man owning your own home outright is an unbelieveable achievement" now i see what she meant.
Ouch, That can be steep, but you still would actually own the house. I’m really not sure what I would do. Not living in them exact curcumstances I can’t give good advice here.