Housing

Mortgage guarantee

A mortgage? A mandate? Why is my bank asking me to provide a guarantee? The law requires that a home loan be covered by some form of mortgage guarantee. In most cases, this mortgage is taken out on the property you wish to purchase with the loan. However, it can also be taken out on any other property you own provided it is located in Belgium.

There are several kinds of mortgage guarantee
  • A standard mortgage is a collateral on your immovable property that is constituted by means of a notary deed.
    This instrument effectively involves using your property as collateral. If, despite all the facilities available at ING, you are unable to repay your loan, the mortgage allows the bank to sell the mortgaged property in order to recover any outstanding debt. You should also be aware that registering a mortgage involves certain costs.
  • A mortgage mandate is a contract that grants ING the right to constitute a mortgage on your immovable property without your intervention. The mortgage mandate is conferred by means of a notary deed.
    This contract essentially authorises the bank to take out a mortgage on your property at some point in the future, in the event of any difficulties in repaying the loan. This kind of contract also involves costs, although they are lower than those of a mortgage.
  • The mortgage promise is a contract signed between you and the bank. By signing this contract, you are committed to take out a mortgage on your property in the future at the bank's request.

Depending on your circumstances, it is possible to combine these different types of mortgage guarantees. Your ING contact person will be able to recommend the best formula for your personal situation. You should bear in mind that you are only entitled to tax benefits on the part of your home loan that is covered by a mortgage.

Mortgage registrations do not automatically disappear once the loan has been repaid. They remain valid for up to 30 years for the total amount of the original registration. In some cases, you may therefore reuse the capital you have already repaid as a guarantee for a new loan. That means you can start a new property project without having to pay stamp duty on the mortgage.