Types of mortgages

When it comes to mortgages, many people look at the interest rate first. However, the options for adjusting the type of mortgage and the repayment plan in the interim are just as important. You should also take a good look at the fiscal consequences, the expenses and premiums.

What is the true price of a mortgage?

In addition to the interest and the premium, the ‘price’ of a mortgage is determined by the repayment plan, the fiscal aspects and any additional conditions. De Hypotheker has a unique automated advice system which provides you with a clear picture of the true price of a specific mortgage. The data of all financiers and insurers in the Netherlands are included in the system. That way it is possible to make an objective comparison of all mortgages.

The flexibility of the mortgage

Most mortgages have a term of 30 years. In practice, however, there are few mortgages that continue for the entire period without changes. That is why it is important to choose a mortgage that is flexible. During the term of the mortgage you then have the option to adjust a number of matters. There are usually charges involved.

You can determine the degree of flexibility by looking at the following points:

  • What options are available for a subsequent fixed interest period?
  • To what extent are extra payments possible and what are the related costs?
  • If I move, can I take the mortgage with me without incurring costs and at the same interest rate?
  • Can I pass on the mortgage at the same interest rate and without penalty and handling fee to a future buyer of the house?
  • What options exist to extend the term of the loan?
  • Can I increase the mortgage without incurring notary fees?
  • Can I continue the life insurance policy separately from the mortgage?
  • Can I dispose of my investment balance in the interim?

The acceptance policy of mortgage institutions

All mortgage institutions have their own acceptance policy: rules which must be met before a mortgage is granted. Usually the following aspects play a role in the acceptance policy:

  • What is the maximum mortgage amount that can be borrowed based on the income and the value of the house?
  • What standards are applied without a Nationale Hypotheek Garantie?
  • How does a financier determine one’s creditworthiness?
  • To what extent will your partner’s income be counted
  • To what extent is a mortgage possible if you are in part-time employment?
  • Are special conditions set with regard to health or age?
  • What are the conditions regarding repayment of the principal sum?
  • What is the condition of the house?

Taking out a mortgage

Have you selected a mortgage? Then De Hypotheker will take care of the application for the mortgage offer and will submit the requisite documents. The mortgage institution will check your application against its own rules and will draw up an interest offer. The offer will set out, among other things, the amount of the loan, the conditions, the interest percentage and the monthly instalments. Usually you have about two weeks to accept this offer. Then everything has to be officially arranged – from the approval of the financier and the medical examination to the drawing up of the documents by the notary and the deed of transfer. De Hypotheker will take care of these formalities for you. 

The notary

After the acceptance of your offer your advisor will inform the notary that the documents are available. After the evaluation the mortgage institution will send the requisite papers to the notary. Once the notary has received these, you will be invited to sign the mortgage deed and purchase deed for your house. This is called the execution of the mortgage deed and/or the deed of transfer. At the same time the notary will send you the draft of the mortgage deed and the final invoice. The final invoice also states the amount of your own money that must be transferred to the notary. De Hypotheker will take care of the entire mortgage application process. The notary arranges the financial side; he will ensure that all documents comply with the wishes of the parties involved. Many mortgage institutions will pass on the advantage to the lender/buyer if interest rates drop between the date of the offer and the date of execution of the mortgage deed. Partly for this reason the interest can be lower, but never higher than the interest in the offer, provided the validity term is not exceeded.

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