Over two million Dutch citizens have an interest-only mortgage. This is a type of mortgage in which the mortgagor is required to pay only interest during the duration of the mortgage. If the consumer does not make any voluntary repayments, the debt will stay the same until the end of the term.
At the end of the term or when selling the house, the remaining debt needs to be repaid at once, e.g. by using the surplus value of the home. If that is not possible, for example because the home has decreased in value, the bank will propose to take out a new mortgage. However, this new mortgage can only be granted to consumers with enough income. A high mortgage debt at the end of the term thus involves great risk.
Research by Vereniging Eigen Huis shows that over a third of the home owners with an interest-only mortgage thinks they will not be able to repay their debt at the end of the term. This is an alarming number of people with a high-risk situation.
Vereniging Eigen Huis collaborates with Netvice to find solutions for these kinds of matters. In this case, Netvice introduced the idea of an application as a means to inform their members about their personal level of risk. They asked JAM-IT to develop a tool that enabled consumers to calculate their own risk level.
Business Need: Over two million Dutch citizens have an interest-only mortgage. This is a type of mortgage in which the mortgagor is required to pay only interest during the duration of the mortgage. If the consumer does not make any voluntary repayments, the debt will stay the same until the end of the term.
At the end of the term or when selling the house, the remaining debt needs to be repaid at once, e.g. by using the surplus value of the home. If that is not possible, for example because the home has decreased in value, the bank will propose to take out a new mortgage. However, this new mortgage can only be granted to consumers with enough income. A high mortgage debt at the end of the term thus involves great risk.
Research by Vereniging Eigen Huis shows that over a third of the home owners with an interest-only mortgage thinks they will not be able to repay their debt at the end of the term. This is an alarming number of people with a high-risk situation.
Vereniging Eigen Huis collaborates with Netvice to find solutions for these kinds of matters. In this case, Netvice introduced the idea of an application as a means to inform their members about their personal level of risk. They asked JAM-IT to develop a tool that enabled consumers to calculate their own risk level.
Solution: In collaboration with Netvice, JAM-IT developed the Mortgage Risk Calculator. Any home owner with an interest-only mortgage can use the tool to find out how much risk is involved in their situation. The results of the scan are shown directly on the page. Furthermore, the conclusion can be downloaded as a PDF file, which explains how the risk has been formed.
The Mortgage Risk Calculator was created in close collaboration with Vereniging Eigen Huis and Netvice. The latter had created flow diagrams that showed every variable in combination with the next step. JAM-IT translated this input into Mendix, which created the calculation tool. Mendix’s highly visual nature enabled JAM-IT to give both Vereniging Eigen Huis and Netvice great insight into the workings of the tool. JAM-IT then used their own WordTemplater to generate the documents containing the results, and used the Office 365 API to convert these automatically into PDF files for download.
The Mortgage Risk Calculator is GDPR-friendly, since it does not require consumers to provide any personal information. Therefore, all data is collected anonymously.
Results: The Mortgage Risk Calculator enables Vereniging Eigen Huis to inform their members about their personal situation. This is an extra service to their membership. Any consumers who find out they have a high risk situation can choose to consult the Home Owners Association for further guidance.
The solution is cost-efficient and time-efficient, since consumers can utilize it themselves with no need for assistance. The tool is easy to use and protects the anonymity of its users, which provides a substantial outreach. The tool has already been used successfully 85.000 times.