A new mortgage
What options do you have when you want to take out a new mortgage?
If you want to take out a new mortgage, you can choose from two types of mortgage, the annuity mortgage or the linear mortgage. Below you will find briefly the specific characteristics of both mortgage types.
The annuity mortgage is a type of mortgage in which, assuming an unchanged mortgage interest, the monthly amount remains the same during the term. The monthly installment is called annuity. The monthly amount consists of an interest part and a repayment part. At the start you pay a larger portion of interest and the repayment portion is smaller. Due to the continuous repayment, this shifts and you pay more repayment and less interest towards the end of the term. The interest part is tax-deductible, so that the net monthly costs are lower in the beginning. Because the interest portion is getting smaller, the net monthly costs are slowly increasing over the term.
Characteristics of an annuity mortgage
- Gross monthly charges always remain the same
- Start of term: low net monthly costs and high interest (interest is tax deductible)
- End of term: higher net monthly costs
- Duration maximum 30 years
The linear mortgage is a type of mortgage in which a fixed amount is repaid periodically during the term. In the case of a term of 30 years (360 months), 1 / 360th part per month must be paid, plus a descending amount of interest. Due to the repayment of the principal (the loan amount), the mortgage debt decreases, so that the borrower pays less and less interest. The interest owed is calculated on the outstanding balance of the principal sum.
Characteristics of a linear mortgage
- Suitable mortgage type due to amended mortgage rules in 2013
- Guaranteed repayment at the end of the term
- Declining net monthly costs
- Build up capital quickly and safely with the repayments
- Declining monthly costs during the term
- Good to combine with other mortgage types
Which mortgage is most suitable for you?
Which mortgage type best suits you and your situation is something you may already have a good idea of. If you would like sounding boards or if you simply would like a consultation, please fill in our application form . Our mortgage specialist will contact you to discuss the options with you.Request a mortgage quote