Knowledge Base

Welcome to the Expatax Knowledge Base containing hundreds of answers to questions we received about topics concerning tax, payroll, accounting, legal, business etc. related to the Netherlands. Search in our Knowledge Base or browse the different categories. Expatax is a Dutch tax and accounting firm specialized in assisting international workers, freelancers and companies. Don't hesitate to contact us if you need assistance or check our website.

What is a repayment mortgage?

Repayment mortgage or amortisation mortgage

There are two types of repayment mortgage:

  • linear
  • annuity
With the linear mortgage you pay off the same amount every month for the entire mortgage term, but because you are paying off the mortgage, the amount of interest you pay decreases. With this mortgage you have higher gross monthly payments at the beginning of the term and lower towards the end. This is the reason why it may not be the best option for starters. Due to the decreasing interest also the tax benefit will be lower every year. The tax benefit is the highest at the start, but at that moment your income as a starter my not be the highest, meaning that the interest is deducted at a lower percentage than the tax rate which may be applicable at a later age.
With the annuity mortgage you pay the same amount every month in total, comprised of repayment and interest. In the beginning of the mortgage term the amount comprises mostly of interest and less of repayment, as the term carries on you start to pay more on repayment and less on interest. With this mortgage you have the same gross monthly payments throughout the whole term of the mortgage. This makes it easier to plan your payments. The same comment about the deduction of the mortgage interest is applicable on the annuity mortgage.
Attached Files
There are no attachments for this article.
There are no comments for this article. Be the first to post a comment.
Security Code Security Code
Related Articles RSS Feed
Which type of mortgage can I choose?
Viewed 3367 times since Thu, Dec 8, 2011
How is the provisional refund calculated when partners bought a house together?
Viewed 14743 times since Mon, Nov 28, 2011
Euro mortgage
Viewed 1909 times since Fri, Aug 30, 2013
Unhappy with mortgage - can I change it from interest only to repayment?
Viewed 8109 times since Thu, Nov 7, 2013
What can an expat do when this scenario happens?
Viewed 6547 times since Tue, Nov 19, 2013
I have left the Netherlands and rented out my Dutch house. Now the mortgage provider is creating problems.
Viewed 26049 times since Sat, Nov 26, 2011
Selling house before 10 years fixed
Viewed 3229 times since Fri, Nov 1, 2013
What is a mortgage with repayment at the end of the term?
Viewed 2917 times since Thu, Dec 8, 2011
What is a non-repayment mortgage?
Viewed 3141 times since Thu, Dec 8, 2011
New mortgage rules in 2014 - tax and legal consequences
Viewed 11553 times since Thu, Jan 9, 2014