Setting the rate for your family mortgage

The rate on a family mortgage must be market-conform: close to what a bank would charge for a comparable home loan. Set it right and the interest stays deductible for the borrower and untaxed as a gift for the lender.

Where the band sits

A family mortgage is secured by the home, so its rate belongs near bank mortgage rates, not consumer loan rates. Look at current offers for similar loan-to-value and fixed periods to find the acceptable band.

A rate far below market turns the forgone interest into a gift. A rate far above market is not accepted either, because then the borrower is effectively gifting the lender. The band protects both directions.

Document and review

Write down how you chose the rate: which bank offers you compared, on which date. One paragraph in the contract file answers any later question from the Belastingdienst in seconds.

Review the rate when market conditions shift meaningfully, for example once a year. A short addendum keeps the loan market-conform over time, especially on longer terms.

FLUX5 shows the current band for secured home loans in the calculator and logs the reasoning with the contract. Yearly reviews take minutes, not paperwork weekends.