VEH: "A risky mortgage moves too often to a new home"

Nine in ten people with interest-only mortgages use them to buy a new home. A big risk, says Vereniging Eigen Huis (VEH)

VEH and the Nederlandsche Bank often warn of the dangers of a mortgage without mortgage, but few homeowners solve more. This is evidenced by a study conducted by VEH for which 142,000 mortgage applications were filed by owners of a mortgage loan with such a high risk.

Out of 60,000 claims, the interest-only mortgage was used almost entirely to fund a portion of a new home. And it's risky, according to VEH. "Especially people over 50 must ask themselves if they can also afford the costs of their retirement home, when interest rates rise and the mortgage interest deduction ends," said Hans André Porte de VEH, spokesman for VEH

pointed out the Nederlandsche Bank Lenders are more likely to report this risk to their customers and think about appropriate solutions. "But the mortgage advisor warns far too little about it," says De la Porte.

Between 2035 and 2038, 700,000 interest-only mortgages are due

With a no-refund mortgage, buyers only pay interest and do not have to pay. As a result, the monthly costs are low. Between 2035 and 2038, some 700,000 interest-only mortgages will mature: the loan must be repaid in one installment. Many households may face problems, with older people being the largest risk group.

Since 2011, the interest rate of interest-only mortgages can no longer be deducted from the tax authorities, which makes it much less attractive. But this rule does not apply to people who have already had such a mortgage. They can still use the loan with deduction of mortgage interest when buying a new home, provided that the interest-only mortgage portion does not finance more than half of the house.

Dutch mortgage debt comprises more than half of a loan that has not been structurally repaid. That represents 340 billion euros.