Calculating monthly construction deposit costs
Let’s say you buy a property for € 200,000, and are going to renovate it at a cost of € 30,000. The interest on your (annuity) mortgage is 2%.
At the start, you pay the full amount of interest and repayment over the € 200,000 mortgage, which comes to € 739.24 per month. Over the € 30,000 in the construction deposit account you will only pay a repayment sum totalling € 61 per month. Thanks to the interest compensation, you will not yet be paying interest on your construction deposit account.
Withdrawing half the amount
When half of the amount has been withdrawn from the construction deposit account, there will still be € 15,000 available for the renovation. In the meantime, € 215,000 in mortgage has been taken out. The monthly charge at that time is € 794.68 for the mortgage + € 30 per month in repayments for the remaining € 15,000 in the construction deposit account. Together, that amounts to € 825 per month.
Full amount withdrawn
The moment the full amount is withdrawn from the construction deposit account, you will owe repayment and interest on the full mortgage sum of € 230,000. In total, that amounts to € 850.12 per month.
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