The mortgage contract, line by line
Everyone compares rates. Almost nobody reads what comes with them: the revision formula, the loan-to-value that conditions them, the products you have to take to obtain them, and what it costs to get out. That is where thousands of euros are decided over twenty-five years.
The rate is not the price
The number the bank leads with is the borrowing rate. The number that matters is the APRC, the annual percentage rate of charge, which folds in arrangement fees, valuation fees and everything the loan makes compulsory. Two offers at the same borrowing rate can have APRCs several tenths of a point apart.
Before the offer, the lender must give you a European Standardised Information Sheet, the ESIS. It is a standardised document, identical from one bank to the next: that is what you compare, not the brochure. It gives the APRC, the amortisation table, the revision formula if there is one, and the total cost of the credit.
What the APRC does not contain weighs heavily all the same: deed costs — registration duties, notary fees, mortgage registration — are paid in cash and cannot be borrowed. On a €300,000 property they run from €10,154 in Flanders to €16,654 in Brussels. That is the first figure to put on the table, before any talk of rates.
Ask each bank for its ESIS before you choose, not after. It is free, you are entitled to it, and it is the only document that makes two offers genuinely comparable.
Fixed, variable, semi-variable
A fixed rate never moves: the last month's payment is the first month's. You pay for that certainty with a higher starting rate.
A variable rate is revised at fixed dates, on an official reference index published monthly in the Belgian Official Gazette. The bank does not decide the revision: it applies a formula written into the contract. What is negotiable is the frequency and the cap.
Belgian law frames variable rates more tightly than most neighbouring countries, and that is exactly what comparison sites leave out:
Hence the notation you see on offers. A 5/5/5 is revised every five years, a 1/1/1 every year. The +1/−1 or +2/−2 alongside says by how many points each revision may move. A 5/5/5 capped at +1 is a very different product from a 1/1/1 bounded only by the legal minimum — even though both are labelled “variable”.
The semi-variable formula, fixed for a few years then variable, makes sense for someone who knows they will sell or repay before the switch. Much less so for a property kept thirty years: the switch then falls on a date you did not choose.
What each formula actually does
| Formula | What you gain | What you carry |
|---|---|---|
| Fixed | The payment is known to the end. The household budget is computable twenty-five years out. | A higher starting rate. If rates fall durably you must refinance to benefit — and pay to do so. |
| Capped variable (5/5/5, 3/3/3) | A lower starting rate, and a legal cap that bounds the worst case. | A payment that can rise. You have to check the budget holds at the capped rate, not the starting rate. |
| Annual variable (1/1/1) | The lowest starting rate, and the fastest pass-through of a fall. | The highest volatility. A formula for those with headroom, not for those at the top of their capacity. |
| Semi-variable | A quiet period at a fixed rate, then flexibility. | The switch falls on a date you did not choose. Avoid it if your horizon runs past the fixed period. |
The right question is not “what rate today” but “does my payment hold if the rate reaches its cap”. That can be computed: run the capacity simulator with the contract’s capped rate rather than its headline rate.
Loan-to-value, and what it buys
Loan-to-value is the share of the price financed by the bank. Borrowing €240,000 for a €300,000 property is 80%. After income, it is the parameter that weighs most on the rate you are offered.
The National Bank steers lenders towards contained loan-to-values on an own and only home, with limited room above and a little more for first-time buyers. It is not law but a supervisory expectation, and it shows in the pricing grids: the thresholds often sit around 80% and 90%.
The practical consequence is counter-intuitive: putting €10,000 more into your deposit can be worth more than haggling over a tenth of a point, if it takes you under a threshold. Conversely, emptying your savings to lower the ratio and ending up with no reserve is a bad trade — the bank also looks at what is left after the deed.
Watch the arithmetic trap: loan-to-value is measured on the price of the property, but deed costs come on top, out of your savings. A €60,000 deposit in Brussels does not go into the property as €60,000: the costs take a good part of it first. The capacity simulator makes that subtraction, which bank simulators do not.
The term: the real trade-off
A longer term lowers the monthly payment and raises the borrowable capital. That is the sales argument. What is shown less often is the price of that extension.
At the same maximum monthly payment — €1,320 for a household on €4,000 net with no other credit — here is what the term changes at 3.5%:
| Term | Capital | Interest | Total repaid |
|---|---|---|---|
| 20 years | €227,602 | €89,198 | €316,800 |
| 25 years | €263,671 | €132,329 | €396,000 |
| 30 years | €293,957 | €181,243 | €475,200 |
Going from twenty to thirty years yields €66,355 more capital and costs €92,045 more in interest. The capital gained therefore costs more than itself. That is not an argument against a long term — sometimes it is the only way to buy — but it is the figure to have in mind before choosing one out of comfort.
A second, less visible effect: beyond twenty-five years many banks tighten conditions or add to the rate, and your age at the end of the loan becomes a topic. A long term is paid for twice.
Tied conditions
The advertised rate almost always assumes conditions: paying your income into an account at the bank, taking the building’s fire insurance there, and above all taking out outstanding balance insurance there. Each condition met shaves a few hundredths off the rate.
That is lawful, and not necessarily a bad deal. But two things must be checked before signing:
You are not obliged to take the outstanding balance insurance from the lender: you may take it elsewhere and pledge it as security. The bank may then apply its rate without the reduction, but it may not refuse the loan on that ground. Having both scenarios costed almost always pays.
Repaying early, or elsewhere
A mortgage can be repaid early whenever you wish, in whole or in part. The bank then charges an early repayment penalty, and this is where Belgian law protects the borrower best: it is capped at three months’ interest on the capital repaid early.
Three months of interest is little by European standards. It is what makes refinancing genuinely worth considering in Belgium as soon as the rate gap becomes meaningful.
Refinancing is not free for all that. Two routes, two costs:
A mortgage registration runs for thirty years. A loan settled before that term therefore leaves a live registration: it lapses on its own after thirty years, at no cost, but if you sell or refinance before then a release is needed — a notarial deed, and a paid one. That cost is anticipated, not discovered at the notary’s office.
Before refinancing, work out the break-even: add the early repayment penalty, arrangement fees and, where applicable, deed and release, then divide by the monthly saving. If the break-even runs past the period you expect to keep the property, the operation is worthless.
Putting three offers side by side
A single offer cannot be judged. Three offers compared on the same lines can. These are the lines that make the difference, and that you should demand in writing:
The rest — how welcoming the branch is, how fast the answer comes — matters for the life of the file, not for its price. Do not let one decide the other. Our guide on approaching the bank covers preparing the file, and the one on mortgage mistakes covers what not to do at this stage.
What we do not put a figure on
This page describes mechanisms and legal protections. It deliberately gives no market rates: they move every week, and a dated page displaying them does more harm than good.
Nor do we put a figure on arrangement fees. They are regulated, but the amount that applies is on your own offer, and that is the one that binds you — we do not publish a figure we have not verified at source.
On tax, finally: for a loan taken out today on an own and only home, there is no longer any regional benefit of the housing bonus type. All three regions have shifted the help into registration duties — reduced rates in Flanders and Wallonia, an allowance in Brussels. An older loan may keep its original regime: the date of the deed governs, not the current year.
For your exact situation, each bank’s ESIS and a statement from the notary are worth more than any simulation, ours included. Both are free, and both are asked for before you commit.
The two tools that go with this
This page explains the contract. The figures are computed: