Congratulations! You have purchased a new home. Which mortgage loan do you choose? The monthly costs depend on the amount you borrow, the interest rate and the type of mortgage loan. A mortgage loan advisor helps you to choose the right mortgage loan. With this information you are well prepared for the interview.
For new mortgage loans you can only deduct the interest under certain conditions. You must repay the mortgage loan in 30 years according to at least an annuity scheme. The linear and annuity mortgage loan are therefore now the most attractive types of mortgage loan.
- Read more about mortgage loan forms
Security for the financier
Before a lender provides you with a mortgage loan, he looks at two things:
- Your income: can you pay the interest and repayment?
- The value of the house: if you can no longer pay the mortgage loan payments, the lender can sell the house. With the proceeds he can then pay the debt.
This gives the lender more security. The interest rate can therefore be reasonably low, compared to, for example, a personal loan. mortgage loan providers must adhere to financing burden percentages (2019). These have been determined by the government. The financing burden percentage is that part of the income that can be used to a maximum of mortgage loan payments. Nibud advises the government on the level of these percentages.
Maximum is not always appropriate
The mortgage loan may not exceed 100% of the value of the home (2019). So you can not co-finance purchase and renovation costs! The exception to this rule is the financing of energy-saving measures (eg roof insulation). Some financiers also offer a discount on the interest rate for such measures. Check with your adviser.
In the case of two-earner households, the second income in 2019 can count for 0.7 when determining the financing burden percentage for the maximum mortgage loan amount.
mortgage loan providers test against legal loan standards how much a household can borrow. Because these standards are based on average budgets, it is possible that the monthly costs do not fit well into your budget. A maximum mortgage loan means substantial savings. Especially if you have specific costs or wishes. Therefore, always look to see if the mortgage loan payments match your own situation and wishes, let us advise you on this.
- See also: Risks for single earners with a family at closing maximum mortgage loan (afm.nl)
Reduce mortgage loan costs
There are possibilities to reduce your mortgage loan costs. These are the mortgage loan interest deduction and the National mortgage loan Guarantee.
mortgage loan interest relief
The interest on a mortgage loan for the first owner-occupied home is tax-deductible under certain conditions. If at least you use the loan to purchase or improve your home. That saves you a lot of money: between 36 and 49 percent of interest costs. This percentage depends on your income: the higher the income, the greater the benefit.
You can only use interest deduction for new mortgage loans on linear and annuity mortgage loans. For existing mortgage loans interest deduction remains possible in all forms. Your mortgage loan advisor can advise you on this.
Note: the repayment of a mortgage loan is not deductible for the tax, it only concerns the interest.
Tip: Do you have extra savings? With a repayment-free mortgage loan, it can be profitable to repay (part of) your mortgage loan in the interim.
Interest rate fixed
You have to pay interest on the debt that is still outstanding. Often you can fix the interest for a number of years. At the end of this period, the interest rate is adjusted to the then current interest rate. It can be higher or lower than what you pay now. If you fix interest rates for more than 10 years, you can borrow a higher amount than if you fix interest rates of less than 10 years.
National mortgage loan Guarantee
When you take out a mortgage loan with a National mortgage loan Guarantee (NHG), the NHG will take over the remaining debt from the mortgage loan lender in case of payment problems. The issuer therefore always gets paid. That is why the mortgage loan interest rate for mortgage loans with NHG can be lower. In certain cases, the NHG can subsequently cancel the residual debt.
Movie: What is the National mortgage loan Guarantee?
Finance expense percentages
mortgage loans with National mortgage loan Guarantee (NHG) must adhere to the financing burden percentages . This is the part of the income that can be used to a maximum of mortgage loan costs. This arrangement prevents that irresponsibly high mortgage loans are provided. This reduces the risk of forced sales and a residual debt. This is advantageous for mortgage loan lenders and home sellers.
is the maximum cost limit for NHG as of 1 January 2019
When purchasing your first home, you enter into a long-term financial obligation. Good preparation for what is affordable helps to make a good choice. The E-book ‘Affordable mortgage loan’ helps you with this.