By having a longer fixed period on your interest rate in the Netherlands, you make sure that the interest rate remains the same. Therefore, you pay according to the same interest rate every month during the fixed period.
You do not benefit from decreasing interest rates, and the longer your fixed period, the higher the interest rate, so the more you pay.
What is good to know is that you can pick multiple interest rates in your mortgage. You can divide your mortgage into two parts and have a piece with a mortgage rate that’s fixed for one year. The other part of the mortgage can have a mortgage rate for ten years or twenty years. So, this option means you benefit from lower payments and have security.
A fixed interest rate makes sure your interest rate doesn’t change during the fixed period. However, the interest rate varies monthly when you have a floating rate. You can lower your interest rate during the fixed period if the difference between your home’s value and your mortgage changes. Your mortgage interest rate may end up in a different tariff class, and as a result, you will pay less interest.
First-time home buyers
Refinance/ or increasing mortgage
Buy to let/ or keep to let
Moving homes/ or bridging loan
The mortgage type depends on your lifestyle and individual situation. Some Dutch mortgages require immediate repayment of the loan and interest, while others allow for postponing repayments and paying only the interest. Since 2013, the only types of mortgages that qualify for the interest tax deduction are annuity and linear mortgage models, where the loan is repaid over a 30-year period through monthly payments.