Around 1 million homeowners have a mortgage loan interest-only mortgage loan. A person with an interest-only mortgage loan will not pay off his debt gradually, but after 30 years suddenly. The repayment of the mortgage loan at the end of the term can be done with your own money or with the proceeds of the sale of the property. Renewal is also a possibility, but most lenders set conditions for renewal. They then test the income again and look at the value of the home.
People who will soon retire and expect a lower income, and people with a high mortgage loan in relation to the value of the home or their income, would do well to discuss their future situation with an independent consultant.
One option is to transfer the mortgage loan to a low interest rate or to opt for interest rate averaging. Currently interest rates are historically low. If you start a new interest period with a lower mortgage loan rate, you will have monthly money. This money can then be used to redeem, or save and later redeem. The mortgage loan can also be converted into a (partly) annuity or linear mortgage loan. With these types of mortgage loan you loose monthly.
Pay off without a penalty
It is also possible to redeem 10% to 20% of the mortgage loan sum annually without penalty. A (larger) surplus value often arises during redemption. In order to maintain maximum interest deduction, the homeowner must reinvest the surplus value if he buys a new house within three years. Of course it is also important enough to keep money behind for unforeseen expenses. It is not easy to get the money out of the stones again.
A move to another owner-occupied home has consequences for the mortgage loan. For movers, an interest-only mortgage loan with many lenders may not exceed 50% of the market value of the new house, even though they had a higher interest-free share earlier. This limit also applies if you transfer the mortgage loan to another lender. There are lenders that offer more space.
What are the mortgage loan costs?
What the monthly mortgage loan payments consist of depends on the mortgage loan type. That is why we explain the monthly expenses per mortgage loan type.
mortgage loan with residual debt
Sold your home and left a residual debt? That’s not nice. Want to know more about a mortgage loan with residual debt and what you can do? Then look here