With an interest-only mortgage the principal is still outstanding in full at the end of the term, and that determines which insurance policies you need around it.
The calculator and the quote form below are in Dutch. Prefer to do this in English? Email info@finassverzekert. nl or call 072 - 509 24 56 and we will take it from there.
We compare the offerings of several insurers
An adviser checks whether the cover suits your situation
A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
You pay interest only. The debt does not shrink, so what you have to repay at the end of the term is exactly what you borrowed at the outset. That keeps the monthly payment low and makes the end of the term demanding: the debt must then be settled out of your own funds, out of the sale proceeds, or through new finance for which you will be assessed again. Often on a pension income.
In insurance terms, that is the defining difference from a repayment or straight-line mortgage. With those the debt falls each year and the risk falls with it. Here, the risk that your dependants or you yourself are left with the full principal stays the same throughout the term. A level term life cover matches that; decreasing cover drifts out of step with the debt over time.
For the finance itself we refer you to a firm with a credit licence. The insurance policies the lender requires or that you need yourself — the buildings insurance on a rebuild value basis first and foremost &mdash. We do arrange.
Please note: borrowing money costs money. Finass Advies B.V. holds a licence for non-life insurance and does not act as an intermediary for credit or mortgages. This page is informative. For an application we refer you to a provider with a licence for consumer credit or mortgage credit. Every licensed provider consults the BKR (the Dutch credit register) for credit of € 250 or more with a term of longer than one month.
The structure of the cover in three parts, with an overview per situation below.
In advance
What you need
What a lender asks for.
Income details
Value of the collateral
Overview of obligations
In addition to the interest
What it costs
What is often forgotten.
Advice and arrangement fees
Valuation and notary
Property transfer tax
Conditions
What goes with it
What the lender requires.
Buildings insurance compulsory
Sometimes term life cover
Interested party on the policy
What is covered
Subject
Explanation
Advice is independent
Yes
We compare several providers
Yes
We arrange credit ourselves
No
Referral to a specialist party
Yes
A first conversation without obligation
Yes
Costs clear in advance
Yes
This overview is general in nature and is not personal advice. What is actually covered, including exclusions, limits and the excess, is set out in the policy conditions and the insurance card (verzekeringskaart) of the insurer; you receive both before you take out cover. Taking out cover without advice? Then read what execution only means for you.
Where things go wrong in practice
Four points that make the difference between a policy that pays out and one that does not.
The end of the term matters more than the monthly payment
The question is not whether you can pay the interest, but what happens at the end of the term. Will you be able to repay the principal, refinance or sell the property then? On retirement, income usually falls while the debt stays the same. Work that scenario through before you choose, and take into account how many years remain after your state pension date.
Why decreasing term life cover does not fit here
Many policies are designed around a debt that reduces. With an interest-only mortgage it does not, so a decreasing sum insured moves away from the actual debt. Also note the exclusions: suicide in the first year is not covered, nor is death through taking part in a war situation, and if the health declaration is incorrect the insurer may rely on Articles 7:928 and 7:930 of the Dutch Civil Code.
Interest relief and transitional rules
For mortgages taken out after the 2013 change in the law, there is no longer any interest relief on an interest-only portion. Transitional rules may apply to earlier loans, but they are subject to conditions and may lapse if you increase the loan, remortgage or alter the interest-only portion. Have this checked in advance by a mortgage adviser; it affects your net outgoings directly.
What the lender wants to see on the policy
Almost always buildings insurance on a rebuild value basis with the lender named as an interested party, so that a payout for a major loss is not simply transferred to you. Note the usual exclusions: deferred maintenance, foundation damage from subsidence or pile rot, and construction and design faults remain outside the cover. Gradual penetration of damp is not covered either.
What does your premium depend on?
Ratio between the debt and the property value. The larger the interest-only portion relative to the market value, the stricter the assessment.
Remaining term up to your state pension date. If the mortgage runs on past retirement, you will be assessed on the lower income.
Fixed-interest period. With a short fixed-rate period the lender applies a notional test rate.
Age and health for the term life cover. Decisive for acceptance, premium and any exclusion clauses.
Rebuild value of the home. The basis for the buildings premium and for the guarantee against underinsurance.
With or without NHG. NHG sets its own requirements for the repayment type and for the maximum interest-only portion.
Insurers weigh these details differently. That is where your saving is.
How we arrange it
You request a quoteWe take stock of your situation, your risk and your wishes.
We compareseveral insurers, on premium as well as conditions.
You receive a proposalWith an explanation of the differences and the exclusions.
We arrange the switchIncluding cancellation, so there is no gap in cover.
Customers rate our service on four aspects: personal service, service delivery, availability and the outcome. The reviews are collected and published by NH1816 and come from customers who have actually taken out a policy with Finass Advies B.V. or reported a claim.
Does the debt really stay the same for the whole term?
Yes. You pay interest only, so the principal does not change. At the end of the term the same amount is outstanding as when you took out the loan. You may make voluntary extra repayments, but you are not obliged to. Bear in mind that at the end the lender will reassess whether you can carry or refinance the debt.
Why do you advise level rather than decreasing cover?
Because the debt does not fall. A decreasing sum insured is designed for a loan that reduces on a repayment or straight-line basis. With an interest-only mortgage a gap gradually opens up between what the policy pays out and what remains outstanding. A level sum insured does follow the debt, but the premium is higher; make that trade-off deliberately.
What happens when I retire?
The interest continues while your income usually falls. Some lenders reassess at the end of the fixed-rate period. If the payments then become too high, the options are repaying from capital, repaying in part, moving or selling. Map this out well before the term ends, not in the final year.
Does Finass Verzekert arrange the mortgage itself?
No. We advise and act as brokers on general insurance. For the finance we refer you to a firm with the appropriate licence. The insurance policies that go with it — buildings insurance on a rebuild value basis with the lender as an interested party, and the term life cover &mdash. We do handle for you.
Finass Verzekert is a trading name of Finass Advies B.V. We advise on and arrange non-life insurance on the basis of an objective analysis of several insurers, and receive commission for this from the insurer, which is included in the premium. You pay no separate advice fee. Before you take out cover, we establish your wishes and needs.
You will find our licence, KvK and Kifid details and our complaints procedure at the foot of every page.
