In order to buy a house, most people have to take out a mortgage loan.
In addition, the property, generally a home, serves as collateral. A mortgage is a loan with a longer term. Often it is 30 years. For the lender, the mortgage is a safe way of lending money, because a house as collateral is a free-value object. When the homeowner can no longer pay the monthly expenses, the lender, often a bank, has the right to seize the property and, if necessary, sell it to get the borrowed money back.
Since the government has set stricter requirements for a loan, the mortgage must in principle be repaid. Commonly used forms are the linear mortgage, where interest and repayment are paid and the monthly costs are reduced during the term and the annuity mortgage. Interest and repayments are also paid here, but the monthly costs remain the same throughout the term.
The mortgage rate
Everyone who has a mortgage must pay interest to the mortgage lender every month. The amount of this is therefore important, because these are costs that come back for a longer period every month. Something to think about, because it determines your living costs for a large part. The different providers all use their own interest rates, so it can be worthwhile to orientate yourself broadly. Who gives the lowest interest at the most favorable rates? You have to take into account that the interest can change every day. If you have chosen everything, do not wait too long to close, because then the percentage can be changed again. The amount of the mortgage interest also depends on the type of mortgage you choose, how much you borrow, ie the amount of the mortgage and the fixed-rate period.
A fixed-rate period
In advance, you agree with the mortgage provider on how many years you want to record the interest. Various periods are possible, from 5 to 30 years. Nobody has a glass ball, so it always keeps guessing how interest rates will develop. If you set the interest rate for a shorter period of time, you will probably pay a lower amount of interest during that period, but the risk that the interest costs will rise after that time is real. In general, the interest rate is slightly higher if you keep it for a longer period of time, but it gives you a longer assurance that the interest rate you have to pay remains the same.
Mortgage interest relief
Anyone who takes out a new linear or annuity mortgage is entitled to mortgage interest relief from the tax authorities. If you meet the conditions, you can deduct the full amount of interest you have paid from the taxable income in box 1. That gives you a considerable tax benefit every year. And with that, the monthly costs are reduced, because the tax authorities will refund you part of the interest paid. You can have the refund refunded annually, but if you indicate this, it can also be done per month.