Linear Mortgage

A linear mortgage is a type of mortgage where you pay a fixed repayment amount every month.
This means your mortgage debt decreases quickly, and therefore also your interest costs — since you pay interest on the remaining debt.

How does it work?

You repay the same amount every month.

The interest decreases each month, because your debt becomes smaller.

Your gross monthly costs are high at the beginning, but gradually decrease.

After the term (usually 30 years), your mortgage is fully repaid.

Example

Suppose you borrow €300,000 for 30 years:

You repay €833 each month (€300,000 ÷ 360 months).

In month 1 you pay interest on €300,000.

In month 2 you pay interest on €299,167, and so on.

Your monthly costs therefore decrease a little each month.

Advantages

Fast repayment: You quickly build equity in your home.

Lower total interest costs: Because your debt decreases faster.

Clarity: You know exactly how much you repay.

Disadvantages

High monthly costs at the beginning: Less suitable for starters with a limited income.

A linear mortgage is especially attractive for people who currently have a good income and want long-term security.