Annuity mortgage
An annuity mortgage, also known as an annuity loan, is a type of mortgage where you pay a fixed amount each month. This amount remains the same for the entire term of the mortgage. The monthly amount is divided into the repayment and the interest. At the beginning of the mortgage period, the largest part of your monthly amount is interest. At the end of the term, the interest portion is smaller and the repayment portion is larger. In the first few years, you therefore benefit most from your tax advantage and your net monthly costs are lower. This makes this type of mortgage interesting for many first-time buyers, as they do not yet have such a high income when they buy their first home.
Fixed-rate mortgage
With a linear mortgage, you repay the same amount every month. The amount depends on the size and term of your mortgage. The mortgage interest you have to pay each month decreases over the term of your mortgage, because you are gradually repaying the mortgage each month. Logically, the interest you pay also decreases. This does mean that your tax benefit decreases over the term of the mortgage, because you are claiming less and less mortgage interest relief.
Free consultation
Would you like more information about the differences between these types of mortgages, or would you like to know which mortgage is best for you? Schedule an appointment. free consultation with one of our advisers and we will be happy to explain all the options. It is also possible to have us perform a free remote check first.