Fixed or variable repayments
Building a home is undoubtedly one of the most important decisions in human life. To build your dream home, you will likely need a home loan. This article provides more information about home loans.
With a Lewis Carl or home loan you can choose between fixed or variable monthly payments. Where is the difference and what is the most beneficial?
With a home loan you always pay back two things: interest and capital. With a formula with fixed monthly payments, you first pay back a lot of interest and as the home loan progresses, more and more capital is paid back.
With variable monthly repayments, the same amount of capital is always paid off, but the monthly amount of interest is calculated.
From a financial point of view, a variable monthly repayment (also called degressive monthly repayment) is the best solution, but since the high monthly cost at the start of the home loan, this is not the easiest solution for everyone.
TIP: Due to the fact that you get a tax advantage on the repayment of capital, you have less tax advantage with fixed monthly repayments (where a lot of interest is paid off in the beginning) compared to variable monthly repayments.