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Amortisation

This is how amortisation and the amortisation requirement work
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What is amortisation?

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Amortisation

Amortisation means that you repay your loan. When you amortise your loan every month, the loan decreases by the same amount.

Amortisation requirement

Different amortisation requirements apply, depending on the loan-to-value ratio and debt ratio in question. 

Demand for amortisation

The loan-to-value ratio represents the size of the mortgage loan in relation to the property’s market value. 

Debt ratio

The debt ratio reflects how much you are borrowing in relation to your gross salary.


The advantages of amortisation

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It is always a good idea to reduce your loans

Even if, according to the amortisation requirements, you do not need to amortise, it is a good idea to reduce your loans.

  • Lower loan-to-value means greater security in the event of a deterioration of your financial situation, for example, as the result of unemployment, illness or retirement.
  • As your loan decreases, so too do your interest expenses.
  • Amortisation reduces the loan-to-value ratio and can mean that the amortisation requirement decreases.
  • If you have amortised all or part of your mortgage loan and sell your property at a time when property prices have been rising, you will have more money available for a down-payment on your next home.
  • If you have amortised all or part of your mortgage loan and need to sell your property at a time when property prices have been falling, you reduce the risk of still having a debt after the property is sold.