Hi all,
I am a complete novice when it comes to mortgages and would like some advice.
We have a mortgage that consists of part savings and part interest-only. The fixed-rate period (10 years) of the savings mortgage ends on March 1, 2019. We received an offer for 10 years fixed at an interest rate of 2.1%. This reduces our monthly costs by 182 euros. At first we were very happy with this, because who wouldn't want lower monthly
payments. But now I'm reading around here and I understand that we shouldn't be so happy with the lower interest rate at all, but better for a higher can choose interest.
Now I have come up with three options myself:
1. we "just" agree with the proposal and fix the interest for 10 years.
2. we are going for a fixed interest period of 20 years at 2.990% interest. I just have no idea how to calculate how high the savings amount will be. The interest amount then goes up slightly compared to a 10-year fixed, but the savings part goes down, so I don't think we're going to sit far from that 182 euro difference. And the tax deduction will be slightly higher. Or am I making a mistake in this?
3. we fix the interest for 3 years at 1.6% interest.
Why 3 years? We are working very hard to pay off the interest-only part. If our financial situation does not change, we will need a maximum of 3 years to fully repay this. I thought it might be a good idea at that time to see if we can do something else with the savings
Equity mortgage. We now have NHG and the term life premium is also based on the full mortgage amount. I understand that this premium does not go down when extra repayments are made. When we get rid of the interest-only part, the mortgage is so low that NHG is not necessary and neither is the death risk. And certainly not if we put the saved part in the mortgage and convert it to, for example, linear.
On the other hand , I also think that any transfer or conversion to another mortgage type will entail costs . Plus that three years at 1.6% is not favorable either. Then we might just as well take the NHG and death risk for granted?
I am very curious about your opinion
