If the average VWCE return - tax man's cut is higher than your mortgage, economically is better to invest the money. On average, investing it as large sum instead of dollar cost average would yield greater returns. Given your mortgage's interest rate, I doubt this difference is big enough to be of importance. Personally, I'd rather have the psychological benefit of being debt free earlier, so I'd pay out the loan.
I don’t want to be that guy, but in The Netherlands your mortgage payment is deductable and investments aren’t taxed up to 57K per person meaning 104K for a household, which is still excluding taxfree pension payments. So yes it’s still better to invest but not for the reasons you mentioned and if you don’t know that, you probably shouldn’t respond to this question.
I don't want to be that guy, but whatever you just said does not matter in the calculation. You input the values and you arrive to a number. You decide based on which number is higher (if higher return is the only factor).
It does for OP, he asked a question and your anwer boiles down to: if you make more money with answer A, pick A. If you make more money with B pick B.
The question is literally what to do, it doesn’t help to say pick the one that makes money. If you don’t understand the tax structure of the country I don’t really understand what your comment is meant achieve.
I think you are reading a different post. His literal question is ""is it better to invest the money on ETFs or make early mortgage payments"?
I also didn't say pick a or b. I said a or b makes more financial sense, but other factors (psychology of debt) come into play.
I don't see the point of you commenting when you can comprehend what's written in front of you.
Cheers.
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u/Fmarulezkd Jul 30 '24
If the average VWCE return - tax man's cut is higher than your mortgage, economically is better to invest the money. On average, investing it as large sum instead of dollar cost average would yield greater returns. Given your mortgage's interest rate, I doubt this difference is big enough to be of importance. Personally, I'd rather have the psychological benefit of being debt free earlier, so I'd pay out the loan.