How do you calculate net and gross monthly expenses?
The monthly costs represent how much you have to pay each month to pay off the loan amount of your mortgage.
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All about calculating your net and gross monthly mortgage payments
There are many things to consider when taking out a mortgage, including, of course, the monthly costs involved.
These monthly costs basically represent how much you have to pay each month to pay off the borrowed sum of your mortgage.
In this situation, the terms net monthly expenses and gross monthly expenses are very important.
Below you can read more about the difference between the two, how to calculate them and in what way Alpina.nl can help you with this.
How do you calculate net and gross monthly expenses?
Based on the above information, the formulas for calculating net and gross monthly expenses are as follows:
- Gross monthly expenses = monthly repayment + mortgage interest
- Net monthly expenses = monthly repayment + mortgage interest - mortgage interest deduction
Although these formulas are straightforward, as a policyholder you should always keep in mind the differences between the various mortgage forms discussed above. After all, only then will you know what to expect on a financial level.
How do you calculate the net and gross monthly costs of your mortgage?
Once you take out a mortgage, you have to pay certain monthly expenses. Depending on what type of mortgage you have, those monthly charges will always consist of different elements.
The most common mortgage forms are the annuity mortgage and the linear mortgage. With these forms, monthly payments always consist of mortgage interest and a monthly repayment:
- The portion to be repaid is taken from the mortgage debt
- Interest is paid on the outstanding mortgage debt
Together, these two elements make up the monthly expenses. Even then, however, there is a distinct difference between gross and net monthly expenses. You can read more about that below.
Instantly calculate the net and gross monthly cost of your mortgage via Alpina.nl
Calculating your monthly expenses is an important step if you want to take out a mortgage with a lender. Anyway, it is recommended to do this analysis and calculation first, before effectively tying the knot. This way you avoid misunderstandings and higher costs.
Fortunately, nowadays it is a breeze to calculate your net and gross monthly expenses, for example by using the online Alpina.nl calculation tool. Do you want a clear overview of your monthly costs for your mortgage, without unpleasant surprises? Then calculate your net and gross monthly costs immediately with the online calculation tool. This way Alpina.nl helps you find the best mortgage for your budget.
The difference between gross and net monthly expenses
So what is the main difference between gross and net monthly payments? Initially, there is always a fixed amount you pay for the repayment of your mortgage and everything that comes with it.
The difference between the two monthly expenses is actually in the portion of the interest paid that you get back from the Tax Office. After all, if your gross monthly expenses are declared to the Tax Office, then you get a portion of that interest back.
As mentioned, the difference between gross and net monthly payments will depend largely on what type of mortgage you take out.
Below is a clear overview of some examples:
The annuity mortgage
With this mortgage, you pay relatively little repayment and high interest at the beginning of the repayment period. Gradually, however, you pay more principal and a little less interest. The net monthly costs also increase steadily as a result.
The linear mortgage
With a linear mortgage, the amount you pay monthly as repayment always stays the same. The interest rate on your mortgage decreases, as the mortgage debt also decreases. As a result, both gross and net monthly payments decrease.
The grace-free mortgage
In the case of an installment-free mortgage, the interest payable is calculated on the outstanding debt. Since you do not repay that debt, the latter remains the same. Therefore, both gross and net monthly payments remain the same during the fixed-interest period.
An important thing to keep in mind is that you will have to repay the outstanding mortgage amount at once if you do not repay and the mortgage term is over.
In addition, you can only deduct the interest from an interest-free mortgage if you already had that mortgage on Dec. 31, 2021. This interest is deductible as soon as the mortgage is taken out. Therefore, once the 30-year term has passed, you may no longer deduct the interest and the net monthly burden increases.
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