What does it cost to withdraw €20,000 in excess value?
Do you want to withdraw €20,000 in excess value? Then you'll pay about €2000 to €3500 in one-time fees. In addition, you will have to deal with monthly costs. How much those will be depends on the term and interest rate of your new or increased mortgage.
When withdrawing surplus value, you will face several cost items. These include mortgage advice, appraisal fees and notary fees. You also pay interest on the amount withdrawn. The monthly costs depend on the interest rate and the chosen term. Below is an overview of the average costs if you withdraw €20,000 in equity via an additional mortgage:
Cost summary €20,000 excess value withdrawal
Monthly fees are based on a 5% interest rate and a 30-year term. Do you take out a second mortgage with a shorter term? Then the monthly costs will be higher, but you will pay less interest in total.
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Monthly expenses when withdrawing €20,000 in excess value
Want to withdraw €20,000 in excess value on your home? Then it's important to know what that will cost each month. Whether you use it for a renovation, savings or as a financial buffer: your monthly costs determine whether withdrawing the surplus value suits your situation. Those monthly costs depend on your mortgage type, interest rate and whether you are repaying.
Monthly charges at 30-year term and 5% interest rate
With an annuity mortgage, you repay and pay interest. This way, your mortgage debt decreases each month. Do you choose an interest-only mortgage? Then you only pay interest and your monthly expenses remain lower. But beware: your debt remains in full.
What if your interest rate is different?
Mortgage interest rates largely determine your monthly burden. See:
- 4% interest → €96 gross per month
- 6% interest → €118 gross per month
A short fixed-interest period often gives a lower interest rate, but also less security. A mortgage advisor will see if that fits with your current mortgage and future plans. He can also assess whether it is better to increase your existing mortgage, or whether a second mortgage is the best option.
What else determines your monthly burden?
In addition to the interest rate, your monthly burden depends on several factors:
- Your home value and remaining mortgage debt.
- Whether you take out a second mortgage or increase your existing mortgage.
- Either you opt for a new mortgage with repayment or a repayment-free option.
- Your income and current financial space.
- The purpose for which you want to use the excess value, such as remodeling or preservation.
In all cases, you will face additional monthly expenses. Especially with an annuity loan, where your monthly costs increase because of the repayment. Even with a small amount such as €20,000, it is smart to look carefully at which type of mortgage suits you.
Not sure what the right choice is for you? Then get good advice from an experienced mortgage broker or financial advisor. They will look at your income, mortgage type and future plans. This way you can be sure that you are not taking any risks and that the monthly costs fit your financial space.
One-time cost €20,000 excess value withdrawal
When withdrawing €20,000 in surplus value, you face one-time fees of €3500 to €5400. This amount is average and can vary slightly depending on your mortgage type and situation. These costs are usually paid up front or co-financed through an additional mortgage or a higher mortgage.
These costs are part of the process of withdrawing the excess value on your home. They consist of mortgage advice, appraisal fees, notary fees and closing costs. You pay these when you take out a new mortgage, increase your existing mortgage, or apply for a second mortgage. Withdrawing surplus value only works if you meet the conditions. These include sufficient income, an appropriate home value and a responsible mortgage amount. Surplus value occurs because your home is worth more than your current mortgage debt.
Cost summary €20,000 excess value withdrawal
Some of these additional costs are tax deductible. For example, you can deduct consulting fees and mortgage interest on your tax return. As a result, the net costs fall a lot lower.
Unsure about what applies to you? Then ask a mortgage broker for advice. That way you can be sure that withdrawing the surplus value fits your home, your income and your financial goals.
Is withdrawing surplus value wise?
Whether it's wise to withdraw surplus value depends on your situation. You can use the surplus value to renovate, make your home more sustainable or pay off a loan. In other cases, however, it may result in higher monthly costs or additional risk. Taking the surplus value on your home can be smart, but not always.
When is withdrawing surplus value wise or not wise?
When withdrawing surplus value, you should always consider additional costs such as those of the notary, advice and valuation. The interest you pay varies by mortgage type and mortgage lender. Sometimes it is smarter to transfer your mortgage instead of taking out an additional loan. How much surplus value you can use depends on the market value of your home, the remaining mortgage debt and your income.
Want to know exactly whether withdrawing equity is right for your situation? Read more about it in the article on is equity withdrawal wise or seek advice from a mortgage advisor.
Cost excess value inclusion in other amounts
Don't want to withdraw exactly €20,000 of excess value on your home, but more or less? Then it is useful to know what the monthly charges and one-time costs are at other amounts. That way you can better estimate what suits your situation.
View the cost of withdrawing surplus value in other amounts here:
- What does €10,000 excess value withdrawal cost?
- What does €30,000 excess value withdrawal cost?
- What does €40,000 excess value withdrawal cost?
- What does €50,000 excess value withdrawal cost?
- What does €100,000 excess value withdrawal cost?
Unsure how much excess value you can use or what amount is right for your situation? Then request a free consultation with an independent mortgage advisor. You will gain insight into the possible monthly costs, your maximum mortgage amount and all additional costs.
Here's how to calculate home equity
Taking out €20,000 sounds appealing, but it will only work if you have enough excess value. Surplus value arises when your home is worth more than the mortgage still on it. Your home has increased in value compared to the original purchase price or previous appraisal value.
The calculation for surplus value is simple:
home value - outstanding mortgage = excess value
Your home is worth €375,000. You still have €355,000 of mortgage outstanding.
375,000 - 355,000 = €20,000 excess value
Is the difference big enough? Then you can increase your mortgage, take out an additional mortgage or opt for a second mortgage. Note that your income and financial situation must allow for this.
Not sure how much excess value you have or what your options are? Learn how to calculate your equity here, or schedule a free consultation with a mortgage broker. Who will see if withdrawing the equity in your home fits your goals.
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