Last week we went to the bank to talk about a mortgage. Here in Belgium, 40% of your mortgage is can be deducted from your taxes.
You can deduct 1520 euro during the entire course of the mortgage. Additionally, the first 10 years, you can deduct an extra 760 euro. You pay 40% less in taxes.
With numbers: if you pay 4000 per year, you can deduct 2280, which causes you to pay 912 less in taxes.
Now we got a very nice interest margin on our mortgage: for loaning 155k on 10 years, we pay 1.14%. That's 1366,90 per month.
After 10 years, we will have paid 164.028 euro (to loan 155.000 euro). But we get 2*912*10=18240 back in taxes, so we'll effectively have paid 145.788 euro.
Now we're thinking: would it be interesting to loan a bit more money, which'd enable us to invest our savings at a higher interest rate than 1.14%? Even with inflation, on a 10 year horizon, this should be doable?