The annuity mortgage is one of the classics and basic mortgages.
• A fixed end date;
• During its life, amortization is done through periodic instalments.;
• The debt reducation is guaranteed
• From a fiscal point of view, the mortgage is less favourable
The gross monthly charges will remain the same during the life of the mortgage. The charges paid each month, is called the Annuity. But the composition of the charges changes over the years. At the start, the amount of interest paid is large and the amortization charge is less. At the end, this is the opposite. This means that the fiscal benefit is deminished during the life of the mortgage. At the start you have a large interst deducation, at the end these are less. The net monthly charges will thus increase gradually.
Classical mortgages aren’t favourable anymore. Still, in some cases it can be the best solution, for example for so-called BoxIII loans without interest deduction