When buying a property, you will almost always need a mortgage. There are different types of mortgages, ways to pay interest, and agreements that are documented in offers. All these choices impact

• What amount you are going to pay monthly.
• The total amount of your loan.
• Your financial flexibility in the future.

How you repay your mortgage determines how your debt gradually decreases and how your monthly payments evolve. The most common mortgage types in the Netherlands are:

• Linear mortgage: You repay a fixed amount each month. On top of this amount, you pay interest. 
• Annuity mortgage: You pay a fixed total each month. This amount includes both interest and repayment.
• Interest-only mortgage: You only pay interest. At the end of the term, you repay the amount you lent.

Linear and annuity mortgages are the most popular. You can benefit from mortgage interest tax relief when filling in your annual tax return. This means that your net monthly costs are lower.

Interest-only mortgages are often combined with one of the other two types. If you are considering this type of mortgage, be aware that it comes with strict conditions. We do not recommend this mortgage for first-time buyers.

Your monthly payments and financial stability are also influenced by the interest rate and how long you fix the rate.

Mortgage interest is the percentage you pay on the amount you still owe. You can choose to fix the rate for a short or long period:

• Short fixed-rate period: The rate is fixed for 1 to 5 years. This can be good if rates are falling, but it is less predictable.
• Long fixed-rate period: The rate is fixed for 10 to 30 years. This gives you more certainty about your payments.

You can also get a mortgage interest deduction. This is a tax benefit. You can deduct part of your interest from your taxable income when you do your taxes in the following year.

Before you get a mortgage, you receive documents that show the conditions and the amount you can loan. First, you get a provisional mortgage offer. If everything is checked properly, you will receive a final one.

• Provisional mortgage offer: You send your details to the lender, such as income data, any debts, etc. They check it quickly and give an estimate of how much you can borrow.
• Definitive mortgage offer: All your information is checked and approved. Your final situation also has been approved. The offer you receive now is final.

If you want more details about any of these terms, just click on the underlined word. On these pages you can read extra information, and we give some examples.