The Dutch insurance company has launched a pilot project for a starter mortgage, which can be repaid in 40 years in an annuity. The expectation is that every starter will be entitled to the WelThuis Starter Mortgage from the end of May. Is this then the solution to the problems that young people face in the tight housing market?
Together with 54 intermediaries, Bank runs the pilot. Only the first 30 years can you deduct the mortgage interest. With the WelThuis Starters Mortgage, Bank focuses on young people who buy their first home. By extending the term of repayments by 10 years, starters are more likely to be eligible for a mortgage than before. Their monthly payments relating to the mortgage will also be lower. A mortgage with a term of 40 years is ultimately more expensive, because you pay off longer and therefore pay interest longer.
If you want to be considered for a mortgage with a term of 40 years, you have to comply with certain conditions. Besides the fact that it has to be your first home, you have to secure the interest for at least 10 years. Furthermore, the gross monthly costs remain the same for 40 years and a maximum of 15 per cent extra free of charge can be repaid in between.
Bank wants to carefully monitor the introduction of the WelThuis Starters Mortgage. Hence the pilot, which started mid-March 2018. At this moment you can take out the mortgage with some mortgage lenders. According to the planning of Bank, the insurance company will offer the product nationwide at the end of May. According to Bank, with the WelThuis Starter Mortgage you choose the flexibility of now and the certainty for later. The mortgage fits according to the insurance company in the time in which we live. We live longer, work longer and retire later. Taking the time to repay your mortgage will fit in well with the organization.
More opportunities for starters
With the Bank pilot, start-ups get more opportunities in the housing market. A good development, because the number of starters, who can pay an average starter home, has almost halved in the past five years. This was shown earlier by an analysis by consulting firm IG & H. Whereas in 2012 29 percent of the single starters could finance an average starter home, in 2017 this was only 16 percent.
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