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The mortgage in fine is a mortgage that is paid in full only at maturity. But how does the real estate loan work in fine? Why take out a mortgage in fine? What are the advantages and disadvantages? Here are some answers that will help you understand what the mortgage in fine.

How does the real estate loan work in fine?

If the capital that is borrowed by the purchaser is refunded at the end of the loan at one time, the interests are themselves reimbursed every month during the entire period of the loan. To take out such a loan, the buyer must show his bank that he hasa sufficiently stable financial situation to allow him to repay his loan in full and at once at the end of his loan.
The bank does not blindly trust the buyer, even if it is in good faith, since it requires him to make a transfer of a predefined amount on a banking product of choice, mainly a life insurance, so to build up savings. This savings is seen as a real financial guarantee for the lending bank.
If the mortgage in fine can not concern a sum lower than 21.500 €, there is no maximum ceiling. This loan is granted for a period from 3 to 15 years old.

The mortgage loan in fine presents an interest mainly for professionals or for individuals who wish invest in real estate in order to rent it.

What are the advantages and disadvantages of home loan in fine?

The mortgage loan in fine presents an undeniable tax advantage since it allows highly taxed persons with property income to deduct the interest on their home loan from the rental income they receive. To the extent that the deduction is all the more important as the interest, the mortgage in fine is really interesting! In fact, interest is calculated on the capital that remains to be repaid. However, in the context of the mortgage in fine, the capital is not amortized and the interest remains important, thus allowing to benefit from an equally important tax deduction.

The main disadvantage of this type of loan is its rate which is higher than that of real estate loans whose capital is depreciable.

Learn more about other types of home loans:

  • The loan relay
  • The modular loan
  • The real estate loan without contribution

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