Mortgage and mortgage deed

When you take out a mortgage, you sign a mortgage deed. The mortgage deed states the amount of the interest and the fixed interest period. The mortgage deed also contains clauses to protect the mortgage provider if the homeowner is unable to pay the monthly mortgage costs.

Mortgagee and mortgagor

The mortgage deed names the mortgagee and the mortgagor. The buyer of the house is the mortgagor (owner of the house). The mortgage provider (bank or other) is the mortgage holder. The mortgage holder has provided the mortgage loan using your house as collateral.

Mortgage interest

With a mortgage you pay mortgage interest. Of course you want to choose the lowest possible interest rate to keep your monthly costs low and/or affordable. However, you should not focus solely on the low interest rate when taking out the mortgage. The interest may be low and therefore favorable, but the other conditions may be unfavorable, meaning that your monthly costs are still high. If the mortgage provider wants to have (part of) the mortgage debt paid, the mortgage deed states the maximum amount that the mortgage provider can claim back in fines, unpaid mortgage interest and other costs.

Paying off mortgage

The mortgage deed also states what the interest rate is and how long the fixed interest period is. How the mortgage debt is repaid is also stated in the mortgage deed. Information about the fixed interest period and the amount of interest is not always stated in the mortgage deed. With a credit mortgage, the fixed interest period and amount of interest are stated in a separate deed.

House as collateral

The mortgage lender has the right to have your house as collateral. In the event of non-payment of the mortgage debt, this gives the mortgage provider a guarantee not to take the ship. The mortgage deed also describes the house and all the trimmings (garden, garage, address). The mortgage deed also states when the mortgagor became the owner of the house.

Mortgage lender protection

The mortgage deed contains conditions that should protect the mortgage lender. The mortgage provider may also sell or auction the house if you are unable to repay the mortgage debt as agreed. The mortgage deed also states that the house may not be rented out without the mortgage lender’s permission. It may contain a management and eviction clause and a non-change clause. In other words: if the mortgage is not paid, the property can be evicted.