Increasing your mortgage to withdraw home equity

Excess value occurs when the value of your home exceeds the amount of your current mortgage. The two main reasons for the creation of excess value are rising market values and paying off your mortgage. Often it is a combination of the two. Excess value can be seen as equity. However, the money is not immediately available to you. It's in the bricks. There are ways to withdraw your equity by increasing your current mortgage. Of course, the excess value would also be released if you were to sell your home. 

It is also possible that your home is worth less than the amount of your current mortgage. In that case you speak of a negative equity. This is also called a residual debt. If you were to sell your home at that time, you would be left with a debt.

It is important to have a clear picture in advance of what you might want to use the excess value for. If you want to use the excess value to renovate or make your home more sustainable, you can use a construction deposit. This will be a new loan part on top of your existing mortgage. You pay today's interest on this new loan part. The mortgage interest on a construction loan is tax deductible. Here you can find more information about increasing your mortgage for a renovation. 

It is also possible to take the surplus value for something else. For example, to buy a car, a second home and so on. In that case we speak of a consumer credit mortgage. This means that the excess value is not used to purchase or improve the property. The mortgage interest you pay on this type of mortgage is not tax deductible. Also, it is not possible to take out such a mortage mortgage with every mortgage provider. In an introductory call we can discuss the possibilities in your situation.

If you plan to withdraw the excess value on your home, you may want to look at increasing your existing mortgage. In addition, you can also look at the benefits of refinancing your mortgage and include the increase in that. 

Over the years, your needs may have changed. It is also possible that your existing mortgage is no longer entirely appropriate. This could be a reason not to increase your mortgage, but to transfer it to a new bank. In addition, it is also possible that you may be offered a lower mortgage rate at another bank and thus be more financially advantageous.

In an advisory call we will compare the two options. Together we will look at an option that appeals to you the most.