The amortization of this mortgage is done by saving through a life insurance. The height of the final yield is not guaranteed. The wording traditional means that modern forms have been developed since then.

Characteristics
• No amortization during lifetime of the mortgage;
• Monthly charges consist of interest and a premium;
• Maximum fiscal possibilities;
• At the end of its lifetime, the mortgage is (partially) amortized with the capital insurance;
• The yield of the saved or invested premiums is tax-free, under certain conditions;
• Often a guaranteed calculated interest of 3% is applied giving the opportunity of a higher yield;
• The combination mortgage provider/ insurance company is not a fixed link but free.

Warranty up to 60%
In most cases a guaranteed interest remuneration of 3% is offered over the saved amount. This is called the fixed calculated interest. This interest remuneration gives a yield of 60% to 70% of the mortgage debt at the end of the mortgage’s liftime or at the moment of decease of the insurant. For this insurance a fixed premium is paid each instalment period.

Higher yield
Most often the yield the insurance company gains with your premium is higher than 3%, which ultimately leads to a higher end result. That is why at the end of the mortgage’s lifetime, most often you will have enough capital to fully amortize the debt.

No guaranteed end result
With a traditional mortgage the development of the capital is (partially) depending on the results obtained. That is why the end result is not fixed beforehand. Our advisers can inform you extensively on the comparison between yield and risks.

Fiscal exemption
Mortgages combined with a life insurance can use fiscal exemptions: the so-called “tax exemption for capital insurances own house”. This exemption means that during 15 or 20 years, one can build a tax-free capital. You pay no taxes over the capital built (it falls under Box 1) and the end capital yielded is tax-free. For 2006 the exemptions are € 31.900 and € 108.600 respectively, in total € 140.500. The exemptions are once-only per insurant and apply also when the insurance yields in case of decease. Are you married or living together? In that case you may count with twice the amount: € 281.000.  The condition is that you must have paid the premium during 15 or 20 years without interruptions and that the highest annual premium cannot be more than ten times the lowest annual premium. Each year these amounts are being indexed.