Mortage overpayment
Do you have savings left over or have you received an inheritance or a gift? Then you can make additional repayments on your mortgage. A one-off large amount or a number of smaller repayments over a certain period of time. Think carefully in advance about whether you can really do without the money, especially considering the future.
Should you choose overpayments for your mortgage or not? De Hypotheker will help you if you are in doubt about these additional payments to your mortgage.
- We list the consequences of paying off your mortgage and your fixed costs;
- We calculate what the best financial solution is in your case;
- We advise you on the cheapest and safest way to repay your mortgage.
Penalty interest or penalty-free repayment?
If you choose overpayments on your mortgage, you may have to pay penalty interest. Fortunately, in many cases you can make annual penalty-free repayments on your mortgage, usually between 10 and 20 per cent of the principal. An adviser from De Hypotheker can tell you the maximum amount you can repay penalty-free in your situation and under what conditions. The conditions for additional payments to your mortgage can also be found in the mortgage conditions or mortgage deed.
Pay off your mortgage early or not? Pros and cons of additional repayments
Paying off your mortgage extra offers the following advantages:
- Your mortgage debt becomes lower. This reduces the chance that you will be left with a residual debt when you sell your house.
- Your monthly costs go down. Because your mortgage debt shrinks, you pay less interest every month.
- If you use part of your capital to make extra repayments on your mortgage, you pay less wealth tax than if this capital is in your savings account.
Possible disadvantages of additional repayments may include:
- Your financial buffer gets smaller. Therefore, never repay with money you might still need.
- You reduce your housing debt. As a result, when you sell your current home and buy a new one, you may have to deal with the so-called additional loan scheme. You must then use the surplus value of your house to finance your new home, otherwise you cannot make use of mortgage interest relief.
- You will pay less interest from now on, but you can also deduct less interest from your taxable income. As a result, you will (potentially) pay more income tax.
Additional repayment savings deposit mortgage
Paying off a savings deposit mortgage is less interesting than paying off other mortgage types. With a savings deposit mortgage, however, depositing extra money can be advantageous. Do you have a savings deposit mortgage? Then get proper advice from a mortgage adviser.
Independent advice on paying off your mortgage early
Would you like to know what extra redemption means for your personal situation? Then contact your local branch.