No new year without new mortgage rules. A number of rules will change again in 2023:

1. Home seekers under the age of 35 exempt from transfer tax

From 2023 you will be exempt from transfer tax as a home seeker under the age of 35. Conditions are that the house does not cost more than 440,000 euros and will be occupied by yourself. For buyers who fall outside this scheme, 2 percent of the purchase price is charged as transfer tax. Are you buying the house to rent out? Then you pay 10,4 percent transfer tax.

2. Mortgage deduction drops

In 2021, someone with an income above 69,398 euros could deduct 43 percent of his or her mortgage on the tax return. Since 2020, the mortgage interest deduction for the highest tax scale has been reduced by 3 percent per year. This means that from 2022 the percentage at which the mortgage interest may be deducted will decrease to 40 percent. In 2023, the rate will fall further by 3 percent, which amounts to 37.05 percent.

3. Home ownership scheme is being adjusted

The home ownership scheme describes tax rules regarding mortgage deduction. This way, the government wants to make the rules fairer for, homeowners whose partner has died. At the beginning of 2023, this scheme will be adjusted in 3 parts:

• Additional loan scheme (owner-occupied home reserve)
• Redemption position
• The existing home acquisition debt (BEWS)

4. Maximum mortgage 2023 with NHG

In 2023 you can borrow a maximum of 405,000 euros for an NHG mortgage. Do you want to co-finance energy-saving measures? Then the limit is 429,300 euros. The one-off costs that you have to pay for the mortgage guarantee also decrease. Now they still amount to 0.6 percent of the loan.

Need more information?

Do you have any questions or would you like to know more about the new mortgage rules in your personal situation? Do not hesitate and contact us.

• We map out all financial possibilities
• We tell you whether and how you can buy or renovate a house
• We compare your current monthly payments with the new ones
• We compare the different mortgage and interest types
• We help you to map out a financial plan, for now and certainly for the future
• We tell you everything about mortgages, the risks and advise you on the best mortgage for you
• And of course about everything else that is important

Seen a nice house? Are you looking around or have you already bought something? There is a lot to consider when buying a house. An exciting period follows in which you want to arrange the financial picture properly. No hasty decisions, but thoughtful choices. Buying your own house ensures that you build up value in the form of your own property and you also choose in which district or region you live.

It is a good idea to check your mortgage every now and then so you can be sure that your mortgage still suits you. Your personal circumstances can change, interest rates and legislation also change regularly. Therefore, once every two or three years, review not only the mortgage with us, but also your entire financial situation.

By the way, if it's been a few years, check your current mortgage! Maybe it can be cheaper again!

What is a starter mortgage?

Do you want to buy a home for the first time, but are the high housing costs standing in the way? With the Starter Loan you can, in most cases, still buy the house you have in mind. When you buy a house for the first time, you can sometimes get an extra loan on top of the mortgage, this extra loan is the Starter Loan.

Favorable terms

The Starter Loan, offered by SVN and your municipality, bridges the difference between the acquisition costs of the home and the maximum amount that you can borrow from the bank in accordance with the National Mortgage Guarantee (NHG) standards. The amount of the Starter Loan depends on your income, your equity and the conditions of your municipality. In addition, many banks give extra discounts on the mortgage interest.

No monthly payments for the first 3 years

The Starter Loan has a fixed-rate period of 15 years and a maximum term of 30 years. You do not have to pay any interest or principal for the first three years. After this, you basically pay interest and repayment. If you think you cannot pay the monthly payment, you can request a retest from us for a fee and you will pay a monthly payment that corresponds to the income you have at that time, linked to the then applicable standards of the NHG.

Further assistance

Would you also like to know whether the starter mortgage is possible in your place of residence? The municipality ultimately determines the conditions that you must meet. It is therefore wise to get good advice about your mortgage and the possibilities of a starter loan. Our office knows the rules and helps with the inventory and purchase of your first home.

Buying a house is not something you simply do. You have to make some decisions. Do you still want to rent or rather buy a house? And what kind of mortgage is most suitable for you? When you have the financial picture in place, you can start looking for your dream home. With the help of a real estate agent or would you rather go out on your own? And what requirements does your house actually have to meet?

In any case, you should prepare yourself well for the conversations with the broker, the seller and other authorities. And you should not want to spread your finances too thin.

Housing wishes

List your wishes. Think of: schools, shops, transport, playgrounds and other facilities or space to work from home. Do you prefer to live in a cozy and quiet lace and/or do you need a lot of light and space? So the question is, what are you looking for in a home?

What is you maximum loan?

Before you start orienting yourself, you should of course know in which price range you can start looking. That depends on the housing costs that you can and want to bear. Check with us which mortgage amount suits you best. Now and in the future. Use our calculation tool below that gives a good indication of your options.

Looking for your dream home

You know what you can borrow. Once you've found your dream home, it's time to start negotiating. Do you do that yourself? Or engage a broker. Note that 'emotions' do not get the upper hand. Of course you should not pay more than is realistic.

View the home

Found the house? Then it is time to visit the house. Defects are sometimes difficult to see and are not called 'hidden defects' for nothing.

A building inspection is therefore very sensible, especially for older homes. You immediately have a cost indication of the repair or overdue maintenance.

Determine the value of the home

With a mortgage, the home is collateral for the loan. The bank therefore wants a valuation report. An appraiser carries out the valuation and the costs of this depend on the value of the home. There are also appraisers who charge a fixed amount.

Offer

Exciting: you know how much your mortgage is going to be and what you want to pay. Now is the time to make an offer on your dream home.

To the notary

You can arrange the transfer of the house at the notary, via the deed of transfer. The notary checks the data with the Land Registry. Payments between the lender, the seller and the buyer are also arranged by the notary through a so-called 'third-party account'.

You arrange your mortgage via the mortgage deed, which you sign at the same time. This includes the details of the mortgage, the lender and the conditions.

Aftercare

It is a good idea to check your mortgage every now and then. So you can be sure that your mortgage still suits you. Because your personal circumstances can change.

Interest rates and legislation also change regularly. That is why, once every two or three years, you should not only review the mortgage with us, but also your entire financial situation.

Oh yes, if it's been a few years, check your current mortgage! Maybe it can be cheaper again!

Thanks to the current low interest rates, many mortgages are refinanced and many people benefit from lower mortgage payments. Can your mortgage payments be lower? You can find out in less than 10 minutes

However, lower mortgage payments are not the only thing to look out for. Refinancing your mortgage often involves considerable costs (fine, closing, appraisal and notary costs). That is why it is important to have an expert calculate whether these refinancing costs outweigh the interest benefit to be gained.

Would you like to know whether a reduction in mortgage costs is also feasible for you? Please contact us and let us calculate your personal financial situation.

You now live in your own house or in an apartment. But yes, you want to move in together, your partner is expecting, or you simply want to live bigger (and more comfortable).

The new regulations regarding mortgage interest deduction make it necessary to know what you can do and what your options are. Questions such as 'what do you do with the existing mortgage and linked life insurance' or 'what do I do with the equity in the home' are then discussed.

You must ensure that you do not lose your right to mortgage interest deduction.

In many cases, a second home serves as an investment and/or for recreational purposes. When you need a mortgage for a second home, there are a number of things you should take into account.

No mortgage deduction

The mortgage interest is not deductible. Not even if the financing of the second home is via the mortgage on the main home. In that case, the relevant mortgage part is regarded as consumer credit and the interest on that part is therefore not deductible. On the other hand, any rental income is not taxed.

Banks not willing to fully finance

When you want to take out a mortgage on a home that does not serve as your main residence, there are not many banks that will fully finance the purchase. You should bear in mind that you also have to contribute your own resources. You will often also have to deal with a surcharge on the interest.

You are breaking up, but your future living situation is uncertain. You are faced with an important decision: will either of you stay in the house or will you sell it?

Before you take the plunge, it is wise to get advice from a mortgage advisor. They can make a financial overview for all possible situations so that you can make the right decision in peace.

When a relationship ends, it is important for both parties that financial peace is created.

You have enjoyed living in your home for some time and you like the neighborhood, but now you have other housing wishes. You want a garage or an extra room with a new window. Another reason to renovate is to make the house suitable for your old age. Or simply for more luxury and living pleasure. In all cases, a renovation requires good preparation.

Roadmap

Prepare a step-by-step plan in advance. If you work step by step, you are less likely to be confronted with surprises. Renovating costs money. You need sufficient money, also think about possible permits and take care of good planning.

Financing your renovation

Of course you have made a budget and you know how much the renovation will cost. The question then is how you will finance the renovation. If you have saved, you can of course use that money for the renovation. There are more options for financing a renovation. For example, via a second mortgage, with a gift, or short-term credit. Also look at subsidy schemes that may apply.

Note: interest deduction only with full repayment

Since 1 January 2013, you will only receive mortgage interest deduction if you repay your mortgage in full and at least annuity over a period of 30 years. This means that you pay off a fixed amount each month, which consists of interest and principal. The rule only applies to new mortgages and not to existing (partially) interest-only mortgages.

An annuity loan is a loan in which the repayment amount is chosen for each installment in such a way that the total payment (the sum of interest and repayment) per installment is equal.

Initially, this amount mainly consists of interest. As the term of the loan expires, the interest amount decreases and the repayment portion increases.

At the end of the term, the entire mortgage is repaid. The annuity mortgage offers you a lot of security. Although it may seem at first that the annuity mortgage is cheaper than other mortgage types, you will almost certainly be more expensive over the entire term.

Mortgage annuities - benefits

• Low monthly payments in the beginning: Because you pay almost nothing in the beginning and the interest part is therefore the largest, you have relatively low monthly costs with this mortgage. However, as the term of the loan expires, you repay more and more and so you pay less and less interest. This will increase the net monthly expense.
• Stable (gross) monthly payments: With an annuity mortgage you have the certainty of a fixed amount per month (repayment and interest) and you therefore know exactly where you stand.
• Broadening financial scope: In the beginning you can keep the monthly costs low and that gives you more room in your spending pattern. You can absorb the increase in the net monthly payment, for example because you expect to earn more in the future.
• Wealth formation: Because every monthly instalment contains a small amount of repayment (little in the beginning but more and more later), you no longer have any debt at the end of the term of the loan. You then have full ownership of the house without debt. So you can't be left with a towering debt afterwards.
• Low premium risk insurance: If you do not want to burden your dependents with a mortgage debt, you can take out a term life insurance policy. "Shopping" always pays off here!
• Easy to compare: Quotes for this type are easier to compare than quotes for other mortgage types.
• Low initial costs: In the beginning you will enjoy maximum interest deduction and you only pay a small amount in repayment. As the term continues to expire, the monthly costs will increase.

Mortgage annuities - disadvantages

• High monthly costs in the end: Because you pay almost nothing in the beginning and the interest part is therefore the largest, with this mortgage type you have relatively low monthly costs in the beginning. However, as the term of the loan expires, you pay less and less interest. So your interest deduction will also be less and that will lead to a higher net monthly expense.
• Decreasing tax advantage: It is true that you enjoy a tax advantage with this mortgage form, but because the interest part becomes smaller and smaller during the term of the loan, you benefit less and less from the tax advantage in the form of the interest deduction. This disadvantage only increases if you start earning more and more during the term of the loan. After all, with higher incomes, you also have a higher deduction.

Mortgage annuities - insurance

• Risk insurance: It is often advised to take out a term life insurance policy with this type of mortgage. In principle, a correct choice is an annuity decreasing risk insurance with the same term as the mortgage loan. This prevents that if one or both partners die, the next of kin with (excessively) high housing costs are left behind.
• Purchase value insurance: Purchase value insurance ensures that if you unexpectedly run into payment problems and your home has to be sold, you do not run the risk of receiving less than the purchase value. If your home is sold for less than you paid for it, the difference will be reimbursed by the purchase value insurance. Read the policy conditions carefully!
• Disability coverage: Don't underestimate the chance that you will become disabled during the term of the mortgage. Income often falls much further than expected. Even if your employer has taken extra provisions, such as a WIA gap insurance, your income will fall by at least 30%. This can put the payment of the monthly charges at risk. Supplementary insurance can ensure that your monthly costs in relation to your WIA income return to an acceptable level.
• Unemployment insurance coverage: Unemployment can significantly reduce your income. This can jeopardize the payment of the monthly mortgage payments. An additional unemployment insurance (duration 12 months) can ensure that the monthly installments are adjusted so that they better match your unemployment income. As soon as you have work again and your income is at the old level, the monthly charges will also return to the original level.
• Legal assistance for homeowners: As a homeowner, it may happen that your rights are not always accurately respected by others. You will then have to get your justice. But that is not easy and usually not cheap. Legal expenses insurance can offer a solution. Legal aid ensures you of legal assistance if it is necessary to sue another person. You can think of a contractor who does not comply with the agreements or with regard to a dispute with the municipality. If you already have legal assistance insurance, it is certainly worth checking whether legal assistance in the capacity of a homeowner is also covered.

Mortgage annuities - interesting for:

• If you have a relatively low income, but good prospects for the future, you can consider taking out an annuity mortgage. For example, a young man or woman at the start of a career, now still single.
• With the annuity mortgage you can now benefit from lower monthly payments. The moment you start earning more, you can easily handle the rising monthly costs.
• This type of mortgage is mainly closed if you cannot benefit from the tax mortgage interest deduction. For example with a second home or a business mortgage.

Mortgage annuities - other reasons

• you want to reduce your debt in the meantime
• you don't want to build up capital to be able to repay on the maturity date
• you don't want to invest your money in your own house
• you have no problems with your tax benefit decreasing
• you have no problem with your net monthly payments gradually increasing
• you want low net initial costs in the beginning
• you want constant gross monthly payments during the term
• If you are older or in poorer health, you may have problems taking out capital and supplementary insurance. The annuity mortgage then offers a good alternative to a mortgage with capital accumulation

Note: interest deduction only with full repayment

Since 1 January 2013, you will only receive mortgage interest deduction if you repay your mortgage in full and at least annuity over a period of 30 years. This means that you pay off a fixed amount each month, which consists of interest and principal. The rule only applies to new mortgages and not to existing (partially) interest-only mortgages.

Usually, with an interest-only mortgage, the loan is not repaid monthly. Instead, repayments are often made when the home is sold. As with the annuity mortgage, the monthly charges remain constant as long as the interest rate remains the same.

Interest-only does not mean that you are not allowed to make repayments. If you want to reduce the residual debt in order to ultimately pay less interest, you can repay an amount each year without penalty. This amount is often subject to a maximum.

Interest-only mortgage- benefits

• Low monthly costs: Because you do not repay anything but only pay the interest, you have the relatively lowest monthly costs with this mortgage.
• Stable monthly payments: With an interest-only mortgage you have the certainty of a fixed amount per month and you know exactly where you stand.
• No mandatory capital accumulation: You are not obliged to build up capital in order to be able to pay off the mortgage.
• Maximum tax benefit: You pay interest over the entire term of the loan. This allows you to take maximum advantage of the tax benefit in the form of the interest deduction every year. Pay attention to the tax changes as of 01-01-2013!
• Broadening financial scope: The low monthly costs give you more room in your spending pattern. This is a great advantage if you have a limited budget.
• Easy to compare: Quotes for this mortgage type are very easy to compare.
• Protection against excessive mortgage: Because you can usually only borrow a certain % of the foreclosure value without interest, you never borrow above your financial means.
• No mandatory interim repayments: You are not obliged to make interim repayments.
• Low premium risk insurance: If you do not want to burden your dependents with a mortgage debt, you can take out a term life insurance policy. "Shopping" always pays off here!
• Flexible: Youhave a lot of freedom and flexibility with regard to repayment, capital accumulation and any additional insurance.

Interest-only mortgage- disadvantages

• The debt remains: Because you do not repay anything, your mortgage debt does not decrease. So you don't build up capital. Not paying off is a considerable risk and you will continue to have a mortgage until you sell the house. As long as you stay in your house you will never get out of debt.
• Interest charges continue to exist:Because you do not repay, you continue to pay the interest. After 30 years, this interest is no longer deductible.
• Expense increase upon retirement: After retirement there is a high chance that the net expense will increase due to a reduction in tax deductions.
• Contributing your own money: You must have your own money because you can only borrow a certain % of the foreclosure value without redemption.

Interest-only mortgage - insurance

• Risk insurance: You are often advised to take out a life insurance policy with this mortgage type. In principle, a correct choice is risk insurance that remains the same with the same term as the mortgage loan. This prevents that if one or both partners die, the next of kin with (excessively) high housing costs are left behind. By the way: with a fully interest-only mortgage, the lender usually obliges you to take out a term life insurance policy.
• Purchase value insurance: Purchase value insurance ensures that if you unexpectedly run into payment problems and your home has to be sold, you do not run the risk of receiving less than the purchase value. If your home is sold for less than you paid for it, the difference will be reimbursed by the purchase value insurance. Read the relevant policy conditions carefully!
• Disability coverage: Don't underestimate the chance that you will become disabled during the term of the mortgage. Income often falls much further than expected. Even if your employer has taken extra provisions, such as a WIA gap insurance, your income will fall by at least 30%. This can put the payment of the monthly charges at risk. Additional insurance can ensure that the monthly costs in relation to your WIA income return to an acceptable level.
• Unemployment insurance cover: Unemployment can significantly reduce your income. This can jeopardize the payment of the monthly mortgage payments. An additional WW insurance can ensure that the monthly instalments are adjusted so that they correspond better with your WW income. As soon as you have work again and your income is at the old level, the monthly charges will also return to the original level.
• Legal assistance for homeowners: As a homeowner, it may happen that your rights are not always accurately respected by others. You will then have to get your justice. But that is not easy and usually not cheap. Legal expenses insurance can offer a solution. Legal aid ensures you of legal assistance if it is necessary to sue another person. You can think of a contractor who does not comply with the agreements or with regard to a dispute with your municipality. If you already have legal assistance insurance, it is certainly worth checking whether legal assistance in the capacity of a homeowner is also covered.

Interest-only mortgage-interesting for…

• Who is this type interesting for? An interest-only mortgage is interesting if you only want to mortgage a small part of the value of your house to, for example, free up extra money for an extension or renovation. This type of mortgage is also very suitable for people at a later age, who are moving to a smaller home and bring in a considerable part of their own money.
• A good Tip: It is often not wise to take out the largest possible interest-only mortgage in order to achieve a low monthly payment. This often leads to a shift of the burden to the future. The mortgage will have to be repaid at some point. Chances are you will be left with debt for far too long.

Interest- only mortgage- other reasons

• you don't want to pay off in the meantime
• you want to enjoy maximum tax benefit
• you don't want to save capital to be able to pay off later
• you have no problem with the debt continuing to exist
• you think flexibility is important
• you have an amount of your own money at your disposal
• you want the lowest possible mortgage burden
• you want to invest (part of) your own money in the house

Note: Interest deduction only with full repayment

Since 1 January 2013, you will only receive mortgage interest deduction if you repay your mortgage in full and at least annuity over a period of 30 years. This means that you pay off a fixed amount each month, which consists of interest and principal. The rule only applies to new mortgages and not to existing (partially) interest-only mortgages.

The simplest mortgage type is the linear mortgage. You borrow a mortgage amount, which is repaid in equal amounts during the term of the loan.

You always pay an amount in interest on the debt. The amount with which you repay remains the same throughout the term. But because the mortgage debt is getting smaller due to these repayments, the amount you pay in interest decreases.

Linear Mortgage - benefits

• Rapidly decreasing mortgage debt: With the linear mortgage you pay off a fixed amount every month. Your debt is therefore quickly smaller every month compared to the annuity mortgage.
• Decreasing monthly costs: Because you pay interest every year on a decreasing debt, this interest amount will be lower each time. The monthly payment will therefore decrease. Your spending space will increase.
• Cheapest mortgage type with repayments: If you look at the total costs of this mortgage type (all repayments + all interest payments over the entire term) you will notice that the linear mortgage is the cheapest mortgage. Note: this should not be confused with the term "the lowest monthly payment"!
• Wealth formation: Because a fixed amount is paid in repayment every month, you no longer have any debt at the end of the term of the loan. You then have full ownership of your house without debt. This way you build up a lot of power.
• Total interest expense is relatively low: Calculated over the entire term of the mortgage, you pay the lowest interest expense with this mortgage type.
• Broadening financial scope: The ever-lower monthly costs give you more and more room in your spending pattern.
• Easy to compare: Quotes for this type are easier to compare than quotes for other mortgage types.
• Low premium risk insurance: If you do not want to burden your dependents with a mortgage debt, you can take out a term life insurance policy. Stephania Finance simply looks for the cheapest provider. "Shopping" always pays off!

Linear Mortgage - Disadvantages

• Decreasing tax advantage: It is true that you enjoy a tax advantage with this mortgage type, but because the interest part decreases quickly during the term of the loan, you benefit less and less from the interest deduction. This disadvantage only increases if you start earning more and more during the term of the loan. After all, with higher incomes you also have a higher deduction option that you use less and less.
• High monthly payments in the beginning: With the linear mortgage you pay off a fixed amount every month from the start. In addition to this relatively high repayment, you also pay the interest on the entire mortgage debt in the beginning.
• Limitation of financial scope: In the beginning, the monthly costs are very high and that limits you in your spending pattern. The linear mortgage is therefore not so suitable for people with a low salary; they benefit more from a different mortgage type.

Linear mortgage - insurance

• Risk insurance: We will often advise you to take out life insurance with this mortgage type. In principle, a correct choice is a linearly decreasing risk insurance policy with the same term as the mortgage loan. This prevents that if one or both partners die, the next of kin with (excessively) high housing costs are left behind.
• Purchase value insurance: Although it is not the general expectation that house prices will fall further in the long term, no one can see into the future. The same applies to your personal situation. Purchase value insurance ensures that if you unexpectedly run into payment problems and your home has to be sold, you do not run the risk of receiving less than the purchase value. If your home is sold for less than you paid for it, the difference will be reimbursed by the purchase value insurance. Read the policy conditions carefully!
• Disability Coverage: Don't underestimate the chance that you will become disabled during the term of the mortgage. Income often falls much further than expected. Even if your employer has taken out additional provisions, such as a WIA gap insurance, your income will fall by at least 30%. This can put the payment of the monthly charges at risk. Supplementary insurance can ensure that your monthly costs in relation to your WIA income return to an acceptable level.
• Unemployment insurance coverage: Unemployment can significantly reduce your income. This can jeopardize the payment of the monthly mortgage payments. An additional WW insurance (12 months) can ensure that the monthly installments are adjusted so that they correspond better with your WW income. As soon as you have work again and your income is at the old level, the monthly charges will also return to the original level.
• Legal assistance for homeowners: As a homeowner, it may happen that your rights are not always accurately respected by others. you will then have to get your justice. But that is not easy and usually not cheap. Legal expenses insurance can offer a solution. Legal assistance insurance insures you of legal assistance if it is necessary to sue another person. You can think of a contractor who does not comply with the agreements or with regard to a dispute with the municipality. If you already have legal assistance insurance, it is certainly worth checking whether legal assistance in the capacity of a homeowner is also covered.

Linear mortgage - interesting for…

• In general: if you want to build up a capital quickly (in the form of an ever-increasing equity value on the home) or want to quickly repay a debt, a linear mortgage is interesting.
• A linear mortgage is particularly interesting for people who see their income fall over time and who want to quickly reduce their mortgage debt. These are usually people with a high income who are approaching their retirement date. But also, for example, two-income couples, one of whom wants to work less in the course of time.

Linear mortgage - other reasons…

• you want to pay off your debt in the meantime
• you do not need a capital to be able to repay on the maturity date
• you have no problems with your annual tax benefit decreasing quickly
• you don't want to invest
• you want your monthly payments to decrease during the term

This interest rate variant consists of a period of your choice in which the interest rate is fixed, followed by a period of usually 1 or 2 years, in which you can wait for the best moment to opt for a new fixed-rate period or another form: the reflection period.

Advantages

• you buy "security".
• In addition, you also buy an extra facility in the form of a period of 1 or 2 years in which you can wait for interest rate developments before you decide to opt for a specific fixed-rate period again.
• if the interest rate rises, you will not be bothered by this during the chosen period.

Cons

• you buy "security" and that translates into a higher interest rate.
• the longer the period chosen, the higher the interest rate
• the interest reflection period is an extra facility and that translates into an interest surcharge of usually 0.2%
• If the current interest rate falls, you will not benefit from it.

Risk

With this interest rate variant you do not run any risk during the agreed period.

With this form, the interest is fixed for a period of a number of years of your choice. For example, 5 years fixed, or 7 years, 10, 20 or even 30 years.

Advantages

• You benefit from the certainty about the amount of the interest to be paid, during the period you have chosen
• If the interest rate rises, you will not be bothered by this during the chosen period

Cons

• You buy "security" and that translates into a higher interest rate
• the longer the period chosen, the higher the interest rate
• If the current interest rate falls, you will not benefit from it

Risk

With this interest rate variant you do not run any risk during the agreed period.

This interest rate variant consists of a period of your choice in which the interest rate is fixed, followed by a period of usually 1 or 2 years, in which you can wait for the best moment to opt for a new fixed interest period or another form: the reflection period. .

Advantages

• You buy "security".
• In addition, you also buy an extra facility in the form of a period of 1 or 2 years in which you can wait for interest rate developments before you decide to opt for a specific fixed-rate period again.
• If the interest rate rises, you will not be bothered by this during the chosen period.

Cons

• You buy "security" and that translates into a higher interest rate.
• The longer the period chosen, the higher the interest rate
• The interest reflection period is an extra facility and that translates into an interest surcharge of usually 0.2%
• If the current interest rate falls, you will not benefit from it.

Risk
With this interest rate variant you do not run any risk during the agreed period.

The so-called buffer interest is a mixture of the fixed and variable interest. The interest is fixed within a certain margin. Interest rate fluctuations only take effect if they are larger than the pre-agreed margin: the buffer.

Examples

Suppose the chosen fixed rate is 6% and the buffer is 2%. The buffer is then between 4% and 8% (6-2 and 6+2).

As long as the market interest rate continues to move between 4% and 8%, there is nothing to worry about and you will continue to pay 6% interest.

Suppose, however, that the market interest rate exceeds the upper limit and is 9%, then the agreed interest of 6% is increased by the difference between the upper limit (=8%) and the market interest rate (=9%). You will then pay 6% + 1% = 7%.

Now suppose that the market interest rate falls below the lower limit and is 3%, then the agreed interest rate of 6% is reduced by the difference between the lower limit (=4%) and the market interest rate (=3%). You will then pay 6% - 1% = 5%.

Advantages

• The buffer rate offers you more security compared to the variable rate and is therefore slightly more expensive.
• If the interest rate rises within the bandwidth, you will not be bothered by this during the chosen period.
• The buffer rate is slightly cheaper than the fixed rate variant

Cons

• You buy "security" and that translates into a higher interest rate.
• The longer the period chosen, the higher the interest rate.
• If the current interest rate falls within the bandwidth, you will not benefit from it.

Risk

With the buffer rate you run a little more risk, compared to the fixed rate.

If you expect interest rates to fall in the near future, you can choose to take out a mortgage product with a so-called entry facility.

This gives you the opportunity to switch to a longer fixed-rate period during the entry period (one or two years depending on your choice).

There are mortgage lenders that offer the option of giving you a number of days in the event of an interest rate increase (instead of the expected decrease) to still take out a longer period at the interest rate before the increase.

This is an extra attractive interest rate that can be offered in the form of a discount on the daily interest rate.

But watch out:

• You have temporarily lower interest charges
• The discount only applies to the first fixed-rate period.
• The discount is not automatically recalculated at the next fixed-rate period. You should therefore take this into account when determining the cheapest lender.
• Due to the disappearance of the discount on the first interest rate revision date, the interest expense can still be higher in the longer term, because the normal interest rate with the same provider is much higher and switching entails additional costs.