Loan for residual debt
If you sell a house, then of course you hope that you can pay off the outstanding mortgage amount. If that does not work, you will keep a residual debt . This can sometimes be co-financed in the mortgage of a new house. If that is possible, it is often the best solution, because mortgage interest is usually lower than the interest you pay on a personal loan or a revolving credit.
Take out a loan to pay the residual debt
If you do not buy a new house after the sale of your house, then you can not co-finance any residual debt in the new mortgage. Then you will have to take out a personal loan or an ongoing loan . Let yourself be informed about the possibilities and what is most beneficial to you. The advantage of a personal loan is that you know exactly what you pay interest and repayments each month and how long you have to repay. With a revolving credit the interest rate is variable, so then you do not know exactly how long you have to repay. However, you have the opportunity to withdraw money again in the meantime, so it is more flexible than a personal loan.
The interest on the residual debt is deductible
If you have taken out a loan to repay the remaining debt, the interest is deductible from the tax for a maximum of ten years. Incidentally, this only applies to residual debts that arose before 1 January 2018. This scheme was created to promote the flow of property on the housing market. Remember that if you have taken out a revolving credit to pay off the residual debt, you should not make interim withdrawals. It is allowed, but it also leads to a complicated financial situation: the interest on the repayment of the residual debt is deductible, but that of interim withdrawals is not. After all, this money is not used to repay, but to buy goods or pay a holiday.