Understanding what you will pay for your mortgage

Buying a house is exciting, but also a big financial step. That is why it is wise to know in advance what your monthly costs will be. That way, there will be no surprises and you can make an offer with peace of mind. The monthly costs of your mortgage are easy to calculate calculate. This provides clarity and helps you choose a mortgage that suits your situation.

Why is it important to calculate your monthly costs?

When buying a house, many people mainly look at the purchase price and their maximum mortgage. Yet the monthly amount is at least as important. After all, the monthly costs determine how much money you have left for other expenses each month. By calculating in advance what you can expect, you will not only know whether the mortgage is affordable, but also be better able to choose between different mortgage types.

What is included in your monthly expenses?

The monthly costs of a mortgage consist of more than just the interest rate. They are made up of:

• Repayment: the amount by which you reduce your debt each month.

• Interest: the fee you pay to the bank for borrowing money.

• Insurance: for example, life insurance, which is often compulsory.

• Tax benefit: thanks to mortgage interest relief, you can get part of the interest back through tax.

The ratio of interest to repayment changes over time. In the beginning, you pay mostly interest, later more repayment.

Fixed or variable interest

Choosing between a fixed and variable interest rate has a big impact on your monthly costs.

1. Fixed rate: the interest rate remains the same during the agreed period (e.g. 10 or 20 years). This gives certainty about your monthly costs.

2. Variable interest rate: it can rise or fall depending on market interest rates. This can be advantageous when interest rates fall, but also carries risk.

Most people choose a fixed interest rate period so they know where they stand financially.

Mortgage types and their impact on monthly costs

There are different mortgage forms and each form affects your monthly expenses differently:

• Annuity mortgage: you pay the same amount every month, consisting of interest and repayment.

• Linear mortgage: you repay a fixed amount each month, slowly reducing your monthly costs.

• Repayment-free mortgage: you only pay interest, the loan stays in place until the end of the term.

New mortgages must be fully repaid to keep the right to mortgage interest deduction.

The mortgage interest rate

The interest rate is an important factor in the level of your monthly expenses. The lower the interest rate, the less you pay. Yet it is not always smart to blindly choose the lowest interest rate. Don't always choose the lowest mortgage interest rate, but compare the conditions. Sometimes a slightly higher interest rate gives more flexibility, for instance when repaying early or moving house. Penalty interest rates, closing costs and conditions for fixed-interest periods can also differ considerably from one provider to another.

Other costs to consider

Besides the mortgage itself, there are other monthly housing costs that are often forgotten, such as property tax (ozb), maintenance and insurance, service costs for a flat and energy costs. Including these costs in your calculation will give you a more realistic picture of what living in your new home really costs.

Using a calculation tool

An online calculation tool helps you to quickly understand your monthly costs. You enter the purchase price, the duration, the interest rate and any savings. Then you will immediately see what you will pay monthly. Many tools also give an overview of the total costs over the term of the mortgage. This way, you can easily compare scenarios and determine what suits you best financially.

Peace of mind and certainty

By calculating your monthly costs in advance, you know exactly where you stand. So you can buy a house with confidence, without putting pressure on your budget. A properly calculated mortgage is the basis for years of living pleasure and financial peace of mind.