For retirees whose property value exceeds their remaining mortgage balance, a.s.r.’s life interest mortgage offers an attractive solution. This product enables customers to unlock part of their home equity to purchase another property, improve the sustainability of their current home or make it future-proof. Neriman Polat, Manager Business Development Mortgages, explains: ‘This mortgage is ideal for customers seeking financial security.’
Dieneke, a 72-year-old former nurse, is one such customer. After her wife Leny passed away, Dieneke contacted her financial adviser, Sjaak, to review her situation. ‘Leny worked her entire life at the same bank and had everything well arranged: our insurance policies, the mortgage and some investments. But I realised that if I want to do something different with my life, now is the time, while I am still in good health.’
A holiday home
Dieneke wishes to remain in her current home in Rosmalen but also loves the seaside. A holiday home on the Zeeland coast seems perfect. She sells the shares still registered in Leny’s name: ‘I have no desire for stress and uncertainty about investments.
During discussions with Sjaak, Dieneke emphasises the importance of financial peace of mind: ‘It gives me a sense of security to know exactly what my outgoings will be, without future changes. I hope to have some good years ahead, and the last thing I want is to worry about money.’
Sjaak suggests having her property valued and taking out a Life Interest Mortgage with a.s.r. This allows her to finance the holiday home in Zeeland and secure fixed housing costs for the rest of her life.
Certainty
Neriman Polat, Manager Business Development Mortgages, explains: ‘The life interest mortgage from a.s.r. is interest-only. You pay only interest, which is fixed for life. This makes it ideal for customers seeking financial certainty.’ The mortgage is designed exclusively for retirees with home equity who wish to use it for another purpose, such as making their home sustainable or future proof, or purchasing a second property.
A point of consideration is that the life interest mortgage cannot be transferred to a new property. Neriman adds: ‘And because the interest rate, which is paid monthly, is fixed, you do not benefit from any future rate reductions. On the other hand, you are protected against increases.’ With a verzilverhypotheek or opeethypotheek, no monthly interest is paid; instead, interest is added to the loan balance, and the rate is not fixed for life. If property values fall, this can result in a higher residual debt because the sale proceeds may not cover the mortgage.
Neriman summarises: ‘With the life interest mortgage, you pay fixed monthly interest and avoid uncertainty about future interest rates or residual debt.’ That is exactly what Dieneke was looking for.
Award-winning mortage
In 2021, the life interest mortgage from a.s.r. won the Gouden Lotus Award for the most innovative mortgage product. The award winners are selected by advisers. Neriman notes: ‘We still see strong appreciation from advisers for our life interest mortgage. Mortgages are complex and involve significant amounts. In practice, customers often base their choice of lender on the adviser’s recommendation, which is usually decisive.’
Dieneke also relied on her adviser’s guidance: ‘When Sjaak suggested closing Leny’s bank account, I felt a little guilty. But it wasn’t long before I thought: if I can get better conditions, why not? I need to move forward, in my own way. And I have a very positive impression of a.s.r. The adverts appeal to me because they speak to society as a whole. Everyone understands the message. We were customers of Leny’s bank for 44 years long, so when I see a.s.r. in the media now, I am proud to be a customer of a.s.r.!’
Dieneke has been enjoying her holiday home on the Zeeland coast for almost a year. It is just a 90-minute drive from her home in Rosmalen, and her two dogs always join her on the back seat. ‘Sjaak was a great help to me in making financial choices. Thanks to the life interest mortgage, I can enjoy the years ahead.’