Are you planning to buy a house? Then you can insure yourself with the National Mortgage Guarantee (NHG) against a residual debt. In that case, lenders hardly ever charge interest.
If mortgage lenders take out a mortgage, they run the risk that the customer does not pay back their loan. If the total loan exceeds the market value of the home, then that risk is greater. The lender then charges a surcharge on interest: interest rate. The possible risks have been divided into risk classes by lenders and mortgage interest rates belong to these risk classes. The higher the risk for the lender, the higher the interest for the customer.
No interest premium with NHG or is it?
The number of risk classes used by lenders varies considerably. What most of the lenders have in common is that, for mortgages with NHG, no interest rate surcharge applies. Because the National Mortgage Guarantee Fund (WEW is the organization behind the NHG) with NHG mortgages pays any residual debt under certain conditions, the bank does not run much risk. No interest rate is not always applicable. For example, some lenders use two risk categories for mortgages with NHG. For example, you will fall into the lowest risk class with NHG if you borrow less than 90 percent of the home value. With other lenders, NHG mortgages usually have the lowest risk class. Even if you borrow 100 percent of the home value.
Would you like more advice about taking out a mortgage or switching a mortgage with NHG? Consumind is happy to put you in touch with an independent mortgage advisor in your area.
How much to pay?
Do you fall with an NHG loan, which for example amounts to 100 percent of the house value, not in the lowest risk class? This does not mean that you would be cheaper at another lender, where you would fall into the lowest class. How much you pay depends on the interest rate linked to the risk class. It can happen that a lender uses one NHG class that is also the lowest class. But the interest that applies to this can still be higher than the second NHG class of another lender.
When NHG guarantee?
You can be eligible for the NHG guarantee for mortgages up to 265,000 euros. As a home buyer, you pay 1 percent of the purchase price for the NHG guarantee, with which the WEW assumes the risk of default. With purchase you pay more than if you do not take an NHG mortgage, but because of the guarantee you pay less interest.