A mortgage is a loan that the borrower uses to purchase or maintain a home or other

form of real estate and agrees to pay back over time, typically in a series of regular
payments. The property itself serves as collateral to secure the loan.

There is a primary and secondary market for mortgages. The primary lender is the one
who deals directly with the public. They are the ones that originate the mortgage
loans. But they do not lend the money themselves. A primary mortgage lender makes
money from the loan processing fees rather than the interest paid on the loan.

These primary lenders often lend money to customers and then sell a large number of
the notes to investors in the secondary market. This replenishes their cash reserves.
The lenders on the secondary market are the ones who make money from the
interest.The largest buyers on the secondary market are:

savings institutions, commercial banks, insurance companies, pension funds, and

some types of mutual funds.

Some of the main banks providing mortgages in Belgium include:

ING Belgium (French, Dutch, and English)

KBC (French, Dutch, German, and English)

Types of mortgage in Belgium

Mortgages in Belgium tend to fit into one of these three types:

Fixed-rate mortgages

Fixed-rate mortgages involve paying the same amount every month for the duration of
your loan. This protects you against any changes in interest rates or the wider property
market.

The big advantage is that You will not be affected by any increases in interest rates. If
the interest rate is low but is expected to rise, you will benefit from fixing your low
interest rate. But the disadvantage is that You will not benefit from any potential
interest rate decreases.

Variable-rate mortgages

Variable-rate mortgages go up and down in cost depending on the market, meaning

you won’t necessarily pay the same amount every month. These deals are more risky,
but can work out cheaper for some borrowers.

The advantage is that If the interest rate goes down, your monthly payments go
down.But If the interest rate rises, your monthly costs will increase.
Combined rate mortgages

Combined rate deals offer a reduction on the rates offered on other mortgages but can
be subject to borrowers meeting certain conditions – such as opening a bank account
with the lender or taking out mortgage insurance.