With a linear mortgage, you repay a fixed portion of your mortgage amount each month. As the outstanding amount decreases with each repayment, you also pay less interest. This means that your monthly payments decrease over the term: initially, you pay relatively more, but it becomes slightly less each month.
Because you repay quickly, the total costs (interest) over the entire term of a linear mortgage are usually lower than with other types of mortgages. Moreover, you build equity in your home faster, which is advantageous in case of a potential sale or refinancing.
Just like with the annuity mortgage, you can benefit from mortgage interest deduction in the early years. Keep in mind that your net monthly payments are higher at the beginning, so maintaining a good financial overview is important.
Key features
- Fixed monthly repayment, decreasing interest costs
- Lower monthly payments throughout the term
- Lower total interest costs over the entire term
- Rapid building of home equity
- Fully repaid at the end of the term
Our advisors are happy to help you determine whether a linear mortgage suits your needs and financial situation, now and in the future.