A mortgage is a loan you obtain to buy a home. You must repay this loan to the lender at the end of the mortgage term, which typically lasts 30 years in the Netherlands. This term is linked to the maximum term of mortgage interest tax benefits.

Homeowners use two common practices: some want to become debt-free sooner, while others want to reduce monthly mortgage payments. In both situations, you can achieve this by making additional mortgage payments.

What amount can I repay per year without having to pay a fee?

Your additional mortgage repayments depend on several factors:

Your monthly mortgage affordability.
Your lender's conditions on extra mortgage repayments.

The amount varies depending on your mortgage and the lender. Typically, you can repay 10% and 20% of the mortgage debt per calendar year without penalties.

You have the option to make monthly repayments or a lump sum payment. By making additional repayments, you can reduce your monthly payment amount or shorten the term of your mortgage. However, exceeding the maximum repayment limit may result in a penalty fee. Each lender has its rules regarding penalties, so it's important to review the conditions set by your mortgage lender before making additional payments.

Reasons to make additional payments

If you want to lower your monthly expenses for more affordable living.
If you aim for a reduced mortgage interest rate, leading to a decrease in interest rate.
If you wish to minimize the overall costs throughout the entire term of the mortgage.
If you want to lower the risk of having residual debt.
If you currently have an interest-only mortgage.
If you have surplus funds, such as an inheritance or a tax refund, and want to repay your mortgage.

Reasons not to repay your mortgage early

Due to inflation, the value of money diminishes over time, potentially reducing the real value of your mortgage.
If you have savings, depositing them into savings accounts or investing in shares could yield greater value over the long term than early mortgage repayment.
Any amount used to repay your mortgage is no longer available for other purposes. While you may only need the money after some time, making extra payments makes it inaccessible for potential future needs.
An additional repayment might have tax consequences because it could shorten the duration of tax benefits. Please get in touch with our mortgage specialists for more information.

Alternative way: refinance

Refinancing can also reduce your monthly costs. If the interest rate has dropped and you can switch to a lower one by refinancing with a different mortgage lender, you can decrease your monthly mortgage payments. Contact our mortgage specialist to explore your refinancing options.