Retirement and your mortgage: what happens when you stop working?

Your mortgage simply continues after you retire

A 30-year mortgage keeps running if you retire before those 30 years are up. If you're 55 now with 25 years left on your loan, you'll still be making mortgage payments for a good number of years after you stop working. That's fine in itself, plenty of people manage it without any trouble, but it does mean your retirement income becomes the yardstick for what's financially feasible. And for most people, that income is lower than the salary they pay their mortgage from today.

Why lenders assess your pension income differently

For a mortgage that runs past your retirement date, lenders don't just look at what you earn now: they also look at your expected pension income. Exactly how that assessment works, and which income ultimately counts, differs per lender and per situation. That's why it's sensible to get a clear picture of your current income, your AOW and your supplementary (workplace) pension well in advance.

Interest-only mortgage: what to watch in the run-up to retirement

If part of your mortgage is interest-only, you only pay interest on that part during the term. After you retire, that interest can start to weigh more heavily once your income drops. And at the end of the term, the loan has to be repaid, or refinanced where that's possible. So it's wise to check well before your retirement whether your mortgage will still match your income and assets.

Why it's better not to wait until retirement is close

The earlier you know what your mortgage will cost after retirement, the more options you have. So have the numbers run around 10 years before you retire, rather than at 66 or 67. That leaves you time to adjust course: repay extra, change your mortgage type, or top up your pension. Wait until just before retirement and many of those choices become harder to make, and you have far less room left to adjust.

What you can do right now

Take a look at mijnpensioenoverzicht.nl, the national pension register, to see what you can expect in AOW and pension. Put that next to your current mortgage payments and you'll immediately have a decent picture of where you stand. It's also a handy starting point for a conversation with a mortgage advisor.

Want to know what your mortgage will look like at retirement?

Whether you're 45, 55 or 62: the earlier you have this in view, the more choices you keep. At Belderbrandt in Tilburg we run the numbers with you, free of any obligation, so you know what your mortgage will cost after retirement and where you could adjust. Call 06 52 69 88 22 or email Martin@belderbrandt.nl and we'll schedule an introductory meeting.