Why is calculating your mortgage important?
Calculating your mortgage is important for both yourself and your finance provider when taking out a mortgage. It ensures that you can sustainably make the monthly mortgage payments for the next 30 years. It helps determine your maximum mortgage amount and what is financially justified for you. Our Mortgage calculator for the Netherlands provides a quick and simple way to estimate your maximum mortgage based on factors such as age, income, and relationship status. However, there are other external and personal factors that influence your maximum mortgage.
Mortgage interest deduction & mortgage calculation
One external factor is the mortgage interest deduction, which is a tax-deferred scheme that reduces your net monthly expenses. This deduction allows for a higher maximum mortgage compared to countries without such schemes. The deduction is applicable for mortgages repaid on an annuity or linear basis. However, the mortgage interest deduction is being phased out, with a decreasing impact on the maximum mortgage.
Loan-to-value: borrowing up to 100%
Another important external factor is the Loan-To-Value (LTV) ratio, which is the ratio between the mortgage amount and the house’s value. In the Netherlands, the maximum LTV ratio is set at 100%, meaning you can borrow up to the market value of the home. This protects homeowners from excessive mortgage payments. There is an exception to the 100% rule for sustainable, energy-saving investments. It’s important to consider the LTV ratio when calculating your maximum mortgage, as it affects the additional costs you’ll need to cover.
Transfer tax exemption: increased borrowing capacity
The transfer tax exemption for homebuyers under 35 years old is another external factor that affects the maximum mortgage calculation. If you’re between 18 and 34 and buying your first home valued at € 510,000 or less, you’re exempt from paying transfer tax. This exemption can increase your borrowing capacity. For buyers 35 and older, a transfer tax of 2% applies, while non-primary residence buyers face a higher rate of 10.4%. Keep this scheme in mind when calculating your maximum mortgage.
Personal factor: income
Personal factors also play a role in calculating the maximum mortgage. Your income, including its nature (permanent contract, self-employed, benefits, etc.), is crucial. Self-employed individuals may have irregular income, and stability and income expectations are important considerations. Age is another factor, as your retirement income is taken into account when applying for a mortgage. As retirement income is lower than your current salary, it affects your borrowing capacity.
Personal choices, such as the duration of homeownership, can influence the maximum mortgage. Opting for a shorter fixed-interest period can result in a lower interest rate if you plan to sell the house within a short period. Supporting children or grandchildren in buying a home is another factor to consider. Future work plans, such as working less or more, also impact the maximum mortgage.
Quick mortgage calculation
Calculating your mortgage is possible, but it involves considering various external and personal factors. If you want a quick mortgage calculation and personalized advice based on your financial situation and preferences, our experts are here to assist you.