Paying off extra on mortgage; smart or not?

In some cases, the repayment puts your mortgage in a lower risk category, which also lowers the interest surcharge. Most lenders charge an interest surcharge if your mortgage is proportionately higher than the value of the home. Lenders use different risk classes for this purpose. If your mortgage falls into a lower risk class because of the repayment, this sometimes makes a difference of up to 0.5 percent in interest.

The terms and risk classes often vary by lender. For mortgages with National Mortgage Guarantee (NHG), the interest surcharge does not apply.

So in many cases, paying off your mortgage extra ensures lower monthly costs. For many people, this is the main reason for paying off the mortgage. Nevertheless, it is important to consider this well in advance and seek advice. After all, there are also disadvantages to the extra repayment.

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Because your mortgage debt and possibly mortgage interest is lower, the mortgage interest deduction for taxable income in Box 1 is also lower. As a result, you may end up paying more tax. It is good to include such consequences of the additional repayment in your consideration. For example, it may also affect the amount of allowances or a provisional refund.

"Paying off extra on your mortgage does not in all cases ensure lower monthly costs. Get good advice so you don't have any nasty surprises."

The rules regarding the mortgage interest deduction will change gradually over the next few years. As a result, the effect of your extra repayment may also change. If you have any questions about this, you can always contact us.

The (bank) savings mortgage is a form of mortgage where it is less interesting to make additional repayments. However, you can deposit extra money in the policy or bank account.