Types of Mortgages for Expats in Amsterdam

The most common types of mortgages for expats in Amsterdam are the linear mortgage (lineaire hypotheek) and the annuity mortgage (annuiteiten hypotheek). So, what’s the difference?

The most common types of mortgages for expats in Amsterdam are the linear mortgage (lineaire hypotheek) and the annuity mortgage (annuiteiten hypotheek). So, what’s the difference?

Linear Mortgages

Linear mortgages tend to start with much higher monthly payments. This is because you are contributing a consistent repayment as well as interest fees. The interest fees will be highest when you start repaying the mortgage, but will decrease over time as you repay more and more of your total mortgage. Your overall interest payment is lower with a linear mortgage.

Annuity Mortgages

Annuity mortgages have the same monthly payments throughout the course of the repayment period. The difference here is that you are paying a fixed monthly fee. To start, a higher percentage of your monthly fee will go towards interest and the rest will go to your mortgage repayment. Gradually, this will balance out so that you monthly payments have a lower percentage of interest payment and higher percentage of repayment.  Your overall interest payment is higher with an annuity mortgage, but interest paid is tax deductible.

The type of mortgage that suits you better always depends on your financial situation, the risks involved, and what is available to you. Interested in finding out your best options? Contact me today.