Save to buy a house

In the past, it was common to take out a mortgage for the purchase price of the house plus additional costs. By tightening the mortgage interest deduction scheme, savings will have to be made in the future to buy a house. Until 2008, house prices rose sharply in previous decades. The banks were prepared to provide mortgages of six, seven or even eight times the annual salary. The additional costs were simply co-financed because house prices continued to rise to the horizon. Since 2008, house prices have entered a downward spiral. Banks were forced to become more careful when granting mortgages.

High residual debts upon sale

As long as house prices continue to rise, it is no problem to grant a mortgage above the value of the house. Problems arise when prices start to fall. House prices are expected to fall by 25% in the period between 2008 and 2015. Families who bought a house during the expensive period are severely affected when they have to sell the house. There will be a high residual debt left after the sale.

Example calculation

A family bought a house in 2007 for 250,000. They had no savings, so they also helped finance the costs. A mortgage of 270,000 has been taken out . They opted for half an investment mortgage and the other half an interest-only mortgage. They have to sell the house in 2015. Due to disappointing investment results, only 6,000 has been built up in the capital insurance linked to the mortgage. Due to the drop in house prices, they can sell the house for 187,500 (25% decrease in value). The residual debt is: 270,000 – 187,500 = 82,500. By offsetting the value in the policy with the residual debts, the remaining debts are: 76,500 . After selling the house, the former homeowners must make an agreement with the bank about the repayment of this debt. Under certain conditions, an appeal can be made to the NHG. A requirement for this is of course that the mortgage has been taken out under the conditions of NHG.

Do not co-finance additional costs

Part of the risk of falling house prices can be absorbed by no longer making it possible to finance costs in the mortgage. In 2012 it was decided to gradually phase out the option to finance these costs. From 2013, 105% of the value of the house may still be financed. This option will be completely phased out in 1% increments. In 2014, 104% can still be financed and in 2015 another 103%. In 2018, no costs may be co-financed at all.

Save to buy a house

Mortgage advisors have advised in the past not to invest your own money in the house. The advice was entirely aimed at achieving maximum tax benefits. The repayment had to be postponed until the end date and all possible costs had to be financed in the mortgage. Saving to buy a house is the future. This is an additional obstacle for first-time buyers to buy a house. Due to the decrease in the transfer tax from 6% to 2%, the additional costs have been significantly reduced. In the past, 8% to 10% of additional costs had to be taken into account. The additional costs are now between 3% and 5%.