With an annuity mortgage, you pay the same gross amount to the lender every month. This amount consists of two components: interest on the outstanding mortgage amount and a portion for repayment. At the beginning of the loan term, the monthly payment mainly consists of interest, but as you continue to repay, the interest portion decreases and the repayment portion increases.
A benefit of this is that in the first years you may benefit from mortgage interest deduction, which keeps your net monthly payment lower. As the term progresses, the tax deduction decreases, but the gross monthly amount remains the same.
The annuity mortgage is suitable for mortgages with a term of up to a maximum of 30 years. It provides certainty regarding your monthly payments, making financial planning easier. Moreover, you will be certain that you have fully repaid your mortgage by the end of the term.
Key Features
- Fixed gross monthly payments during the interest-fixed period
- Initially a lot of interest, later more repayment
- Possibility of mortgage interest deduction
- Fully repaid at the end of the term
Do you want to know if an annuity mortgage is suitable for your situation? Our advisors are happy to assist you with personalized advice.