We're a 2 job household, 33 years old, salary roughly 50-50% split, with one small child. We bought a house in the Netherlands in Nov 2015 with a 10 year fixed rate mortgage of 166k euro @ 2.3% interest. We have no other debt.

Now, we've managed to save ~80k euros, which almost does not earn any interest in our savings account. We also need to pay taxes on it. Should we invest it? Or, make extra payments towards our mortgage?

We have no experience investing in the Netherlands and are quite risk averse. Where do we start with investing if we have no experience? Do the ROIs on investment make it more worthwhile than early mortgage repayment?

The usual advice on this network seems US specific. We would appreciate Dutch specific advice.

1 Answer 1


I waited to see if a Dutch native would answer your question first, but the nice thing is the answers to your questions for the most part don't need any specific knowledge of investments in the Netherlands.

What makes the answer to your question fairly straight forward even without Dutch-specific knowledge is that your mortgage interest rate of 2.3% is similar to the returns you could get with risk-averse investments in European markets. Given that, making extra mortgage payments now is the most reasonable thing you can do with your excess savings with one exception.

As the answer to this somewhat related money.SE question mentions

The Netherlands calculates a maximum tax free contribution to your pension each year based on your income. If you contributed less than you were allowed to (pensioengat), you can invest the difference between your actual and allowed contributions in special retirement investments that usually offer tax advantages. A gap like this can be due to getting a bonus or a raise.

Tax-minimization is almost always the most important first step in investing for retirement and if you can take advantage of this you should.

Beyond this it sounds like your life is fairly stable and that you will likely build up more cash over time. It's well worth taking the time while you build up the next lump of cash to learn more about investing as paying down your mortgage early becomes less valuable as your mortgage is near completion. While you are correct that the advice on this platform is generally U.S. targeted the good news is good investment principles (like tax-minimization) are important no matter where you are based.

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