Residual debt financing

Are you planning to move but have outstanding debt? With outstanding debt financing, you can borrow the amount of your outstanding debt as extra funds from some banks by taking out a higher mortgage.

For outstanding debts incurred from 01-01-2018 onwards, interest deduction is no longer permitted.

If there is an existing residual debt incurred between 28-10-2012 and 31-12-2017 and you have increased your mortgage or taken out a loan for this, the interest is deductible for a maximum of 15 years.

It makes no difference for claiming the interest deduction whether you repay the loan or not. Nor does it matter how the loan is taken out.

If your bank does not offer a residual debt financing product, taking out a personal loan or a line of credit can be a good alternative. For these, too, the costs must be manageable based on your income. Sometimes, a family loan can be very attractive fiscally and financially for this portion.