Paying Off Your Mortgage

The key points at a glance

Getting a mortgage comes with paying interest and, of course, repaying the loan. On this page we cover topics including the aflossingsblij (repayment awareness) campaign and penalty-free repayments. You can find more information about paying off your mortgage here.

1. Aflossingsblij

With an interest-only mortgage (aflossingsvrije hypotheek), you don't make any repayments during the term of the loan. When the term ends, you have to repay the entire loan in one go. At that point you can pay it off using savings you've built up in the meantime, take out a new mortgage to repay the old one, or choose to sell your home and use the proceeds to clear the mortgage.

The aflossingsblij campaign was launched in 2018 to encourage households with an interest-only mortgage who would now prefer a different type of mortgage to think about this in good time. One key aim is to prevent people from finding themselves unable to repay the loan in one lump sum at the end of the term and ending up in financial difficulties.

2. Penalty-free repayments

What are penalty-free repayments?

Early repayment of your mortgage usually means you have to pay a penalty to the mortgage provider. In some cases, however, it is possible to repay the mortgage early without paying a penalty. Below you will find several conditions under which you may repay your mortgage early without a penalty. You can find these conditions in your mortgage deed.

How much can I repay penalty-free?

In most cases you can repay a maximum of 10-20% of the mortgage amount penalty-free per year.

Example (with 10%)

Do you have a mortgage of €190,000? Then in the first year you can repay up to €19,000 penalty-free. If you repay regularly and after 5 years, for example, €145,000 of the mortgage debt remains, you can repay €14,500 penalty-free that year, if we calculate with 10%.

It is worth agreeing with your mortgage provider that you can repay more penalty-free, if you want to keep the option open of paying off your mortgage faster.

Why would I make extra penalty-free repayments?

It is worth taking advantage of penalty-free repayments when you want to do something about your mortgage debt. Within the maximum penalty-free repayment limit, you can reduce your mortgage debt relative to the value of the property. By repaying up to 10% of the mortgage debt each year, you can fairly quickly ensure your mortgage doesn't go underwater (where your mortgage is higher than the value of the home). Plus there's a good chance your loan-to-value ratio will drop enough to qualify for interest rate averaging (rentemiddeling). Penalty-free repayments can reduce your monthly costs in two ways: through a lower mortgage debt and a lower interest rate.

Conditions for penalty-free repayments

Early repayment of your mortgage usually means paying a penalty to the provider. In some cases, however, it is possible to repay early without a penalty. Below are some conditions that must be met to repay your mortgage early penalty-free. You can find these conditions in your mortgage deed.

• You can sometimes repay penalty-free at the end of a fixed-rate period.
• If you sell your home, you may be allowed to repay penalty-free.
• If your home is lost, you can often repay penalty-free.
• On a life insurance payout, it is sometimes possible to repay penalty-free.
• If the current interest rate is higher than the rate in your contract, you can usually repay penalty-free.

There may be more or different conditions in your mortgage deed that you need to meet in order to repay your mortgage penalty-free.

What is a penalty-free repayment?

A penalty-free repayment means you can repay a portion of your mortgage each year without incurring a penalty.

How much can I repay penalty-free?

Usually you can repay 10-20% of your mortgage amount penalty-free per year.

Why would I make penalty-free repayments?

By repaying your mortgage debt faster, the debt goes down and you may qualify for an interest rate discount.

Can I repay my mortgage early penalty-free?

Under certain conditions you may repay your mortgage early without a penalty.

Can I repay more than the penalty-free amount?

You can repay more than the penalty-free amount, but you will pay a penalty on the excess. Discuss with a mortgage adviser whether this outweighs the benefit you gain from the extra repayment.