The linear mortgage loan is a cheap mortgage loan form where the homeowner has higher net monthly payments, mainly at the beginning of the term. But as the term of the linear mortgage loan progresses, the costs go down.
With this mortgage loan loan you have the certainty that the house is paying off before the end date of the term. You pay the same amount every month. What is a linear mortgage loan? And how is it that your monthly payments with this form of mortgage loan go downwards, while you do pay the same amounts every month?
With the linear mortgage loan you are becoming more and more affordable every month
With the linear mortgage loan you will always pay off more cheaply. It’s like this: every month you pay the same amount to the bank. After 30 years your mortgage loan has been repaid in full. You pay the same amount of repayment monthly during the entire term (you therefore pay off linearly). Because your total debt continues to decrease, you will also pay less and less interest. So you pay 1 / 360th less interest every month.
Faster mortgage loan repayment
Because you pay faster with linear mortgage loans than with, for example, the annuity mortgage loan, you pay less interest in its entirety. Although borrowing money with this mortgage loan is cheaper than with an annuity mortgage loan, it is not very popular. The monthly expenses are mainly high in the first few years because you then pay extra. Not everyone is willing to offer such a “precious” sacrifice. And not everyone is capable of that either.
Monthly charges linear mortgage loan
As you now know, the monthly costs are particularly higher at the start than with a mortgage loan where you pay off on an annuity basis; the annuity mortgage loan. But every disadvantage has its advantages! Because you pay off a lot in the beginning, the monthly costs will eventually decrease because you will pay less interest.
With the linear mortgage loan you are therefore somewhat more expensive in the beginning. At half the duration the costs are already a lot lower. The linear mortgage loan is considered cheap in its entirety. At least, this mortgage loan loan is cheaper than the annuity mortgage loan if you calculate the mortgage loan costs over the entire term.
Inflation is a bit of a spanner in the food …
With an average linear mortgage loan, homeowners are about four percent cheaper than with an annuity mortgage loan. Inflation does throw a little bit of spanner in the food. Yearly life is slightly more expensive and money is therefore always worth a little less. If inflation in the Netherlands rises, your linear mortgage loan can turn out to be more expensive. Because you solve a lot in the beginning. In fact, an annuity mortgage loan is cheaper with inflation at 3% or more …
What about the mortgage loan interest deduction & linear mortgage loans?
For both types of mortgage loan, the linear and annuities mortgage loan, there is an important advantage: The mortgage loan interest deduction. Without this ‘subsidy on living’ it would be impossible for many people to buy a home. The amount of mortgage loan interest deduction you receive depends on the amount of the mortgage loan and your income. The more you earn, the more tax you pay. It means that people with a higher income benefit the most from the mortgage loan interest deduction for a linear mortgage loan. After all, the interest on your mortgage loan will be deducted from the upper part of your income ….
How to calculate maximum linear mortgage loan?
For calculating your maximum (linear) mortgage loan, there are a number of factors that determine the level of your home loan. You can also calculate online what your monthly costs will be if you would opt for this mortgage loan via Loans or on the website of any bank. The mortgage loan must be fully repaid within a certain period. Usually an ideal term of 30 years is chosen.
Online calculation example mortgage loans
Most banks use this term (30 years) for their online calculation examples. You pay a gross amount of repayment on a monthly basis. This amount is always fixed for linear mortgage loans and therefore does not change. In the course of time, the interest amount you have to pay will fall. To gain insight into your actual monthly expenses (the net monthly expenses = after interest deduction), you can best use a ‘mortgage loan calculator’. This determines for you up to 99% accurately your net mortgage loan monthly payments.
In summary: calculate monthly expenses linear mortgage loan payments as follows:
- Go to the website of the relevant bank or hypotheker.
- Use their ‘mortgage loan calculation module’ to calculate your maximum mortgage loan.
- Fill in all data truthfully.
- Then click on “calculate” and you will get an indication of the maximum loan amount and the monthly costs.
Current interest rate linear mortgage loans
In 2017 and 2018 you borrow money for a home at very competitive interest rates. The interest rate partly determines the maximum amount that you can borrow. In general, the following rule applies: The longer you keep the mortgage loan interest rate fixed, the higher the interest rate becomes during the term.
Short term mortgage loan or long term?
An adviser can assess what is sensible for each situation: Do you opt for a short term with a linear mortgage loan? Or does the choice fall on a long term? A short term is recommended by banks if you do not intend to stay in your new home for a long time. After all, when you move, you are not stuck to a mortgage loan.
A shorter term is therefore often requested by starters. mortgage loans with a short term of 1 to 5 years have a lower interest rate. A term of 10 years fixed interest is also relatively cheap. Between 1 year fixed and 30 years fixed, the difference can be up to 2% interest! You can also opt for a variable loan rate.
Request a mortgage loan quote without obligation
Do you know enough and would you like to apply for a mortgage loan offer? Which can! Search on loan for a cheap and reliable mortgage loan provider and request them a mortgage loan quote without any obligation. We will not see your details. All correspondence is made via the relevant bank or mortgage loan lender. This way your privacy is guaranteed.
Why take out cheap linear mortgage loan
Loan provides independent information. On our website we also show the cheapest mortgage loan providers in the Netherlands. So you do not have to look for a cheap mortgage loan yourself. We do not leave loans and mortgage loans ourselves. We adhere to the rules of the AFM and therefore never issue an advice. For an expert mortgage loan advice on linear mortgage loans, we refer you to the providers that you find on our website.