Mortgage repayment forms

With an annuity mortgage, a monthly amount is paid during the entire term, consisting of a constant interest rate and supplemented with repayment. This repayment is called the annuity. With an annuity mortgage, the gross monthly costs remain the same during the term. As the term progresses, the mortgage debt decreases. As a result, interest charges and therefore the tax deduction will decrease, resulting in an increase in net monthly costs. 

Advantages:

• You pay off your debt during the term;
• In the beginning relatively low net monthly costs;
• Simple mortgage type;
• You can still receive mortgage interest deduction for new mortgages;
• The gross expenses remain the same during the fixed-rate period.

Disadvantages:

• The tax benefit decreases during the term;
• You repay relatively little at the beginning of the term;
• The home ownership reserve increases due to repayment.

The annuity mortgage is especially interesting for people who opt for low initial costs. The annuity mortgage is also ideal for people who expect an increase in income in the future, unless the tax pressure increases (for example, if you fall in a higher tax rate). Due to the recent developments regarding the mortgage interest deduction, the annuity mortgage is increasingly chosen. Many providers offer a discount with a 100% annuity payment. For any further information, please contact us.

Lees hier meer over de annuïteitenhypotheek!

A linear mortgage is one of the simple forms of repayment, whereby part of the debt is repaid monthly. On top of that comes the interest paid on the remainder of the outstanding amount. The monthly costs will therefore decrease during the course of the mortgage.

Advantages:

• You pay off your debt during the term;
• Your monthly payments will be lower during the term;
• You can still receive mortgage interest deduction for new mortgages;
• You can easily take out a second mortgage, the size of the part already repaid.

Disadvantages:

• The tax benefit decreases during the term;
• Relatively high initial loads;
• The home ownership reserve increases due to repayment.

Due to the current developments regarding the mortgage interest deduction, and the simplicity of the linear mortgage, this can be a very interesting form. You are always sure how much of the mortgage will be paid off, making it easy to fit into future plans. Due to recent developments regarding the mortgage interest deduction, the linear mortgage is increasingly chosen.

Don't have a mortgage yet? In that case, loan-free payments may not be made. If you already have a mortgage, the transitional law applies. In that case, you may borrow a maximum of 50% of the value of the home on an interest-only basis.

An interest-only mortgage is a form of mortgage in which you do not pay off during the term, and only pay interest on the loan amount. This interest is no longer deductible for new mortgages. Because you do not pay off during the term, the mortgage debt will eventually have to be repaid from your own resources or by selling the house.

Advantages:

• Low gross monthly costs;
• A way to (temporarily) reduce the costs in combination with another mortgage type.

Disadvantages:

• You do not build up capital;
• It is not possible to get a completely loan-free mortgage. A maximum of 50% of the value of the home may be borrowed on a no-interest basis. You need a combination with another mortgage type;
• The interest charge remains the same;
• The interest is not deductible for new mortgages.

Lees hier alles over de aflossingsvrije hypotheek!

With a savings mortgage, interest is paid on the loan amount every month, and a capital insurance policy is taken out. At the end of the term, the proceeds of the insurance are used to pay off (part of) the mortgage in one go. You will receive interest on the amount saved during the term. This interest is equal to the interest rate of the mortgage. In the event of premature death, the built-in death risk pays out.

Advantages:

• Possibility of tax-free savings;
• Guaranteed benefit;
• It is also possible to create lower monthly costs by contributing own resources. Contribution of own resources means that you make a first deposit with your own money in a life insurance policy.

Disadvantages:

• Endowment insurance cannot be taken to another mortgage lender;
• Premature termination of the endowment insurance can have tax consequences;
• You cannot always determine the level of the death risk cover yourself;
• You cannot opt for a variable interest rate;
• You often pay a higher interest rate than with other mortgage types;
• The interest is not deductible for new mortgages.

By linking mortgage and savings interest, a savings mortgage is especially beneficial with a high mortgage interest rate. Once you have opted for a savings mortgage with a certain company, you are bound by it for the rest of the term. Switching to another lender is possible, but not wise from a financial point of view.

A bank savings mortgage is a form of mortgage in which you save money during the term to pay off the mortgage. You do not save this via a linked insurance, but via a linked bank account: De Spaarrekening Eigen Woning (SEW).

Advantages:

• Guaranteed benefit;
• Tax exemption;
• Free choice of term life insurance.

Disadvantages:

• You are bound by tax rules in order to build up tax-free capital in box 1. This makes you less flexible;
• You are usually tied to the same lender for your mortgage and your savings account;
• With a new mortgage you are not entitled to mortgage interest deduction.

With a bank savings mortgage, there are no unclear costs, and you know exactly how much you have built up at the end of the term. The costs of this mortgage are relatively low. However, the tax regulations make you less flexible, so this is by no means the most favorable form of mortgage for every situation.

With an investment mortgage, you deposit a monthly amount in an investment account and you pay interest on the loan amount. This builds up capital by investing in investment funds. The proceeds will be used to pay off the loan in whole or in part in one go.

Advantages:

• It is possible to create lower monthly costs by contributing own resources;
• With constant interest rates, the monthly costs are constant;
• Fewer tax rules for capital accumulation;
• Possible high efficiency.

Disadvantages:

• You must take out separate term life insurance;
• No guaranteed benefit;
• If the value of your investments exceeds the exemptions, you must pay capital gains tax;
• With a new mortgage you are not entitled to mortgage interest deduction.

The investment mortgage is characterized by the possibility of high returns. The yields of a securities deposit develop less stable than the yields in a life insurance policy.

The life mortgage consists of an interest-only loan with a life insurance policy (endowment insurance). You pay interest on the loan amount and you pay a monthly premium for the life insurance. At the end of the term or in the event of early death, the life insurance proceeds will be used to repay the loan in full or in part at once.

Advantages:

• It is possible to create lower monthly costs by contributing own resources;
• With constant interest rates, the monthly costs are constant;
• The life insurance policy can easily be taken to another mortgage lender.

Disadvantages:

• The amount of the life insurance payment is usually not guaranteed;
• The costs withheld by the insurer are often higher than those of the investor's account;
• Premature termination of life insurance can have tax consequences;
• With a new mortgage you are not entitled to mortgage interest deduction.

The life mortgage is particularly suitable for people with an above average income or people who expect income growth. Because there is maximum benefit from the mortgage interest deduction throughout the life of the life mortgage, the life mortgage can be particularly interesting for people with a slightly higher income.

A hybrid mortgage is no longer available for new mortgages. Do you have a hybrid mortgage? Then you may still be able to transfer them.

You have the following options:

• You can save;
• You can invest;
• You can save and invest.