Tip 1: Research your options on the mortgage market

Get an overview of the market early on to determine which mortgage providers are suitable for you. Mortgages are offered by banks, insurance companies and pension funds, for example, and can be provided purely online or include personal consultation services. Think about what you prefer.

Useful to know

While the interest rate is an important part of your budget considerations, it is not the only one. You should also clarify certain questions in advance, such as: “Can I even afford to own a home?”, “What happens in the event of a divorce and we have to sell the house?”, “Should I use Pillar 3a money for home ownership?”, “Will we still be able to afford the house after retirement?”, “How can I best reduce my mortgage over time?”, etc. Talking to a personal advisor will help you avoid mistakes that might make life difficult later on.

Tip 2: Compare different offers based on your mortgage strategy

Get several offers before starting a negotiation. To do this, however, you must first decide which mortgage model you prefer (e.g. a fixed-rate mortgage or a Saron mortgage) as well as your preferred amount, term, and amortisation rate. We call this a mortgage strategy  A mortgage strategy defines the mortgage model, amount, term and amortization of a mortgage. To this end, you must clarify how much risk the mortgage borrower is willing to take (risk appetite), how much risk they can bear (risk capacity) and the flexibility they need. Much like financial investments, a mortgage strategy has a trade-off between returns (low interest rates) and security (ability to plan interest payments).. This creates transparency when comparing the various offers, as it is only possible to compare offers based on the same criteria. This is the only way to get a realistic idea of the interest rate you want to negotiate.

Useful to know

Exit costs related to early repayment or processing fees often only become apparent in the final contract. Ask for this information in advance so you know what to expect and can more easily compare different offers.

Tip 3: Optimise your position when negotiating your mortgage

When it comes to negotiating your mortgage, you have various options for improving your position:

• Demonstrate that you have already dealt intensively with the subject of financing home ownership. You should also be able to prove to the mortgage provider that you have saved money, have an unblemished financial reputation and are not subject to any debt recovery actions. In other words, that you know how to handle your money.
• The more equity you have, the better your negotiating basis. Make it clear what funds you have at your disposal. To buy a home you must have at least 20% of the purchase price (market value) as equity.
• When negotiating your new mortgage, be confident but also fact-conscious and use the right arguments. If you already have a mortgage with the same provider, demonstrate that you have always paid your mortgage interest on time. Or clarify your expectations of favourable interest rates if you already use other products and services from the mortgage provider.
• You could also offer them additional business and, for example, suggest setting up a funds saving plan for your children or taking out life insurance at the same time. This might incentivise the provider to accommodate you on interest rates.
• If you want to buy an apartment or a house in a good location, it makes sense to use this as an argument in your favour. This kind of residential property is easy to resell and can be an advantage during negotiations.