13 May 2024
Managing your mortgage: reasons to adjust your mortgage
Egle Kemezyte
Growth Marketer

As a homeowner, you may find yourself in a situation where changes in your personal life could impact your mortgage.

For instance, you might be considering a move to a new neighbourhood or need a larger home. In such cases, it's important to know that you have the power to adjust your current mortgage to align with your new circumstances. This blog article explores the most common scenarios where mortgage adjustments are necessary.

Adjust your mortgage to renovate your home

Adjusting your mortgage might be necessary for home renovations, often undertaken to enhance functionality and aesthetics. However, it's important to note that such renovations can significantly boost your property's value, making it a worthwhile investment.

Let's say you want to renovate your kitchen or change the bathroom but don't want to drain your savings. The most common alternative to finance these improvements is by increasing/adjusting your mortgage. Contact our mortgage specialists for more information on which steps you need to take to adapt your existing mortgage.

Refinance to reduce mortgage interest rate

Another common method of adjusting your mortgage is to refinance your current interest rate, aiming to reduce your monthly payments.  If you are locked into a higher rate than prevailing market rates, taking advantage of favourable interest rates might be wise.

Refinancing allows you to replace your existing mortgage with a new one that offers better terms and conditions. This could result in substantially lower monthly payments, allowing you to save for the future.

Refinance to reduce mortgage interest rate

Another common method of adjusting your mortgage is to refinance your current interest rate, aiming to reduce your monthly payments.

If you are locked into a higher rate than prevailing market rates, taking advantage of favourable interest rates might be wise. Refinancing allows you to replace your existing mortgage with a new one that offers better terms and conditions. This could result in substantially lower monthly payments, allowing you to save for the future.

Make additional repayments

Another reason to adjust your current mortgage is to make additional mortgage repayments. Adjusting your mortgage can be advantageous if you aim to reduce monthly expenses, lower interest rates, minimize overall costs, decrease residual debt risk, or transition from an interest-only mortgage.

Relocation from the Netherlands

Suppose you find yourself in a situation where you must leave the Netherlands permanently due to a new job opportunity, personal reasons, or other circumstances, and you must decide whether to keep or sell your property. The scenario where you must sell a property and repay the debt is clear.

Alternatively, if you want to keep your current property for rent, you need to adjust your mortgage product from a residential mortgage to a buy-to-let mortgage. This option offers flexibility and can provide a source of income while allowing you to retain ownership of your property.

Buy-to-let mortgages typically have higher interest rates than residential mortgages, and interest payments do not offer tax benefits. Not all mortgage lenders offer buy-to-let products, so working with a knowledgeable mortgage specialist who can help you navigate your options is essential.

Before renting out your property, it's crucial to familiarize yourself with the rules and regulations governing rental properties in the Netherlands. This includes determining whether you need a permit to rent your property, how much you can charge, and who qualifies as a tenant. Municipalities have varying requirements, including a point-based system determining rental eligibility. Ensuring your property meets the necessary criteria and obtaining any required permits is essential before renting it out.

Getting divorced 

There are several factors to consider when going through a divorce in the Netherlands and adjusting your mortgage.You have a few options if you and your ex-partner jointly own the home.

One option is to sell the house and use the proceeds to pay off the mortgage. Any remaining funds would be divided between you and your ex-partner according to your ownership shares.

Another option is for one partner to buy out the other's share of the property. This involves refinancing the mortgage in the name of the partner who will keep the home. They would then be responsible for making the mortgage payments on their own.

It's important to consult with a mortgage advisor or financial expert who can guide you through the process and help you make the best decision based on your circumstances.

Schedule a free introduction call with our mortgage specialist for personalized advice on adjusting your mortgage and determining the best option. We review your situation, evaluate your finances, and offer practical solutions tailored to your needs.

Need assistance in adjusting your mortgage?

Schedule a free intro call today!

Meet the team
Robin Uijtdehaage
Client Director & Financial Specialist
Lisa Grondsma
Financial Specialist
Egle Kemezyte
Growth Marketer
Sezer Yilmaz
Founder