The annuity mortgage is a repayment form in which you pay the same amount every month. This fixed amount consists of part interest and part repayment. If your interest rate changes, the monthly amount will be determined again.
Because with an annuity mortgage you repay during the term, the distribution between the interest part and the repayment part changes. An annuity mortgage is fully repaid at the end of the term.
At the start of the mortgage - if you have just taken out - the interest part that you pay is greater than the repayment part. The loan amount becomes lower and lower through repayment and therefore you will pay less and less interest.
With an annuity mortgage with a term of 30 years, you have repaid half of the loan after about 18 years. You repay the remainder of the loan in the last 12 years. In recent years, the repayment
portion has therefore been proportionally larger and the interest portion has been lower.
When taking out a mortgage loan, you are entitled to mortgage interest deduction under certain conditions. One of those conditions is that you take out an annuity or linear mortgage. With this repayment form you therefore in any case meet that condition.
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