Surplus value mortgage

Is your home worth more than your mortgage? Then you have a surplus value. In some cases it is possible to use the surplus value on your mortgage, for example to supplement your (retirement) income or to make adjustments to your home. At Alpina.nl we will tell you what you can do with the surplus value on your mortgage.

What is surplus value?

If you home is worth more than your mortgage, we call this excess value. Surplus value is the difference between your current home value and the amount of your mortgage at this time. The part of your mortgage that you have already paid off is not included in this. Surplus value is fixed in the house and is only released when you sell the house or when you redeem the surplus value in another way.

Is your home worth less than the outstanding mortgage amount? Then this is a negative excess value, also called residual debt. If you were to sell the home at that time, you will be left with a debt.

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How does surplus value work?

Is your house worth €450,000, but your mortgage is €400,000? Then you have a surplus value of €50,000. An excess value can arise in a number of ways. For example, your home may have increased in value over time or due to remodeling. Rising house prices also affect the value of your home. If you have lived in the home for a long time, you probably bought it when home prices were a lot lower. With the passage of time and current supply and demand, your home has become worth more than you paid for it at the time. Even if your home has not increased in value, you may have excess value. For example, because you have paid off your mortgage in recent years, so your mortgage is less than the value of the home.

Withdrawing surplus value: is it possible?

Do you have excess value on your home? If so, the money is "stuck" in your home. In that case, you can consider withdrawing the excess value. You can turn the surplus value on your home into a freely disposable amount. Have you been dreaming about doing a major renovation for a long time? Would you like to invest in solar panels? Buy a second home? Or perhaps donate an amount of money to your loved ones? If so, you can use the equity in your home for this purpose. There are several ways in which you can withdraw your equity. For example, you can sell your home, take out a second mortgage or a redemption mortgage. A mortgage advisor can give you personal advice on this.

Using home surplus value

Some extra money, of course, is never welcome. Perhaps you have been dreaming of a vacation home or a major renovation for years. Or perhaps you would like to donate an amount to family members, for example to purchase your first home. Or maybe you want to use your surplus value to supplement your retirement income. There are several ways you can use your home equity for other purposes. We list a number of options for you below:

To finance renovation

You can use the excess value to finance a remodel of your home. The amount you take up in additional mortgage for the renovation will be deposited in a construction depot. From that construction deposit you can pay the bills related to the renovation. Think, for example, of installing a new kitchen, renovating the garden, a bathroom remodel or installing a dormer. Or a complete remodeling of the home. Of course, it depends on how much excess value you have on your home and what amount of that you can withdraw.

To buy other house

You can also use the excess value on your home to buy another home. Once you sell your current home, any excess value is released. You can take it with you to your new home. The mortgage you take out for the new home can already be paid off in part with the surplus value of your old home. Suppose you have a surplus value of €100,000. You buy a new home of €400,00. You can then deduct the surplus value from the price of the new house, resulting in a mortgage of €300,000. This makes a nice difference in monthly costs. However, you must take into account the additional loan scheme. In principle, you must use the surplus value of your home for the purchase of your next home. Otherwise you are not entitled to mortgage interest relief on the amount of the capital gain.

For donation and/or loan

You can also use your excess value to make a gift to your children or other family members. For example, to help them finance studies or buy their first home. Up to a certain amount, the donation is even tax-free. A major advantage of using the surplus value for a gift to your children is that they will soon have to pay less inheritance tax. Children pay a large percentage of inheritance tax on inheritances. A donation is exempt from tax up to a certain amount.