Mortgages in the Netherlands

Buying a home in the Netherlands is a big financial leap of faith, and most people rely on financing to do so. As an international, getting a mortgage in a new country can be confusing. But once you understand the steps and requirements for the different Dutch mortgages, you’ll be on your way to becoming a homeowner.

To help you understand the various financial options available for residents and non-residents looking to purchase a property, as well as the current mortgage rates in the Netherlands, this article covers the following topics:

Expat Mortgages

Looking to buy your new dream home in the Netherlands? Expat Mortgages can help. Their team of mortgage experts can help you with every step of the way, helping you get the keys to your new place in the Netherlands. For more help and guidance, contact the experts at Expat Mortgages today.

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Mortgages in the Netherlands

Mortgages are a hot topic in the Netherlands at the moment. Although mortgage rates were at an all-time low in the early 2020s, they are on the rise once again (as of July 2023). This means that potential buyers may have to pay more to take out a loan. As a result, fewer transactions are taking place than in recent years.

Should you buy property in the Netherlands?

Housing prices in the Netherlands have skyrocketed in recent years due to high inflation and demand. As of 2023, housing prices are at an equilibrium price, meaning that the quantity supplied is equal to the quantity demanded. That being said, housing prices are expected to rise again in 2024.

The affordability of housing is also deteriorating, given that housing costs are rising to match net income. In this way, accommodation in high-demand cities such as Utrecht, Amsterdam, The Hague, and Rotterdam may come with higher costs and risks.

As a result, many potential buyers are playing the waiting game for interest prices to drop before purchasing a property.

However, it is not all bad news. With fewer purchases being made, buyers have a wider choice of houses available, and chances of winning a bid have also increased.

It also helps to remember that rent prices rise each year. Therefore, if you wish to stay in the Netherlands long-term, it often makes better financial sense to buy property rather than rent in the Netherlands, especially as the value of your property is likely to continue to grow.

To weigh up the options between renting and buying, read more about buying a home in the Netherlands and renting a property in the Netherlands.

Who can get a mortgage in the Netherlands?

Technically, anyone with a residence permit, temporary or permanent, has the same formal rights when it comes to applying for a mortgage. That said, if you are new to a job, without a permanent contract, self-employed, on a low income, or of a non-EU nationality, it may be harder to get a loan or financing on 100% of the purchase price.

The requirements change depending on the bank, but generally, you need:

• A valid passport
• A BSN (citizen service number)
• Proof of permanent employment in the Netherlands or proof of income
• For employees, but also temporary workers or PhD students: a statement from your employer (werkgeversverklaring)
• To have lived in the Netherlands for six months (only required by some providers)
• Three years of tax returns and accounting for self-employed residents

It’s worth noting that if you have been self-employed for less than three years it can be very hard to get a mortgage approved.

Getting a mortgage as an expat

Both EU and non-EU citizens are entitled to take out a mortgage in the Netherlands, but the requirements may be stricter for non-EU citizens.

Banks may also not accept to provide non-permanent residents with a mortgage covering 100% of the purchase price if that price is above the National Mortgage Guarantee (Nationale Hypotheek Garantie – NHG), which is €405,000 in 2023.

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Unfortunately, the Mortgage Credit Directive, brought in by the EU in 2015 also made it difficult for banks to offer mortgages to internationals with income in a non-EU currency. This is due to banks having to absorb the risk of currency fluctuations.

However, banks like ABN AMRO found a solution to this problem: they now take into account only 90% of the non-euro income to assess your maximum mortgage amount. This has meant internationals earning in another currency have more options.

Do note, however, that getting a mortgage for a second home to rent is very difficult. Read about buy-to-let mortgages in the Netherlands for more information.

What types of mortgages are available in the Netherlands?

While there are many different types of mortgages available in the Netherlands, the most common are:

Linear Mortgage (lineaire hypotheek)

You repay a fixed amount of your loan each month, which covers the interest and a slice of the capital. Repayments occur at fixed times during the mortgage period. As you pay back the loan, the amount you pay in interest decreases.

Annuities mortgage (annuïteiten hypotheek)

The borrower repays a fixed amount each month. In the beginning, you repay a small amount of the loan and a higher amount of interest (meaning you can deduct more from your income tax) and gradually you will pay more of the loan and less of the interest.

Only these two kinds of mortgages are eligible for income tax deductions.

Some other mortgage types include:

• Interest-only mortgage (aflossingsvrijehypotheek): Where you pay back only the interest, not the loan. Banks only permit this under special circumstances.
• Credit mortgage (krediethypotheek): Similar to a normal bank account, you can withdraw and deposit money and pay interest on the amount you borrow
• Savings mortgage (spaarhypotheek): Links your savings account to your mortgage. Instead of repayments, you deposit money and pay back the mortgage in whole at the end of the term.

Green mortgages in the Netherlands

If your new home contributes towards a greener lifestyle in the Netherlands, you may be lucky enough to apply for a green mortgage (duurzaam wonen hypotheek).

Also known as a sustainability discount, this program helps you receive a reduced rate on your mortgage. To be eligible, you must:

• Buy a home-rated energy label A or B
• Renovate a home to energy label A or B and register the new label within two years of the start of your fixed-rate
• Buy a newly built home

Various schemes that will give you access to a green mortgage. For more information, check with your local bank or read more on ABN AMRO’s website.

Mortgage rates in the Netherlands

The interest rate for your mortgage is based on the term of the fixed period and the risk category of the loan. This risk category is based on the loan-to-value (LTV) ratio: the amount of the loan compared with the value of the property. The lower your LTV, the lower your interest rate.

There are two types of interest rates in the Netherlands: fixed or floating. While floating rates are often lower, there is always the risk that they can increase.

For current mortgage rates, check ABN AMRO’s website for the latest figures.

If your house price increases you may be eligible for a lower interest rate. You can apply for a valuation of your property – known as the WOZ value (WOZ-waarde) by contacting your municipality.

How much can you borrow for a Dutch mortgage?

As a rough guideline, you can borrow up to five times your gross salary, although dual-income households can typically borrow more. If you buy a home with renewable energy systems, you can borrow up to 106% of the property’s value.

As of 2018, the Dutch government placed restrictions on the loan-to-value amount it is possible to borrow. Whereas before you could borrow 101% of the value, the maximum mortgage is now 100% of the property price. This means that any additional costs, like fees associated with the purchase or renovations, have to be financed with your savings.

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Good news, though: keep in mind that you will be able to borrow more if you enjoy the 30% tax ruling on your income.

Online mortgage calculator

You can estimate what your maximum mortgage is, and the length and price of the repayments with an online calculator from services like:

• Expat Mortgages
• Hypotheek Platform
• Independent Expat Finance

Other options include Hypotheek-rentetarieven and De Hypotheekadviseur, which display the latest rates and provide information on Dutch-specific mortgages.

Bear in mind that these calculations can only act as a guide. You should talk to your provider or a mortgage advisor before you take out a mortgage.

Mortgage providers in the Netherlands

Mortgages in the Netherlands may be arranged directly with lenders (typically the larger banks) or via a mortgage advisor (hypotheekadviseur).

Dutch banks offering mortgages to expats

• ABN AMRO (offers English-language mortgage sections on their website and advice tailored to internationals on request)
• ING Bank (English and Dutch)
• Rabobank (mortgages section in Dutch only)
• SNS (Dutch only)

Increasingly, pension funds, insurance companies, small banks, and foreign mortgage providers are also providing competitive mortgage rates.

Mortgage advisors offering mortgages to expats

Mortgage advisors or brokers act as an intermediary between you and the mortgage provider, to advise you on the best fit for your finances. This is especially useful if you don’t speak Dutch or are new to the Dutch property market. International-friendly brokers in the Netherlands include:

• Expat Mortgages
• Hypotheek Platform
• Independent Expat Finance
• Klår Finance

How do you apply for a mortgage in the Netherlands?

In the Netherlands, a mortgage is formally arranged after you have made an offer on a property and it has been accepted.

However, it’s important to make sure you have already investigated mortgage options and chosen your mortgage provider. They can give you a quote which, once you sign to agree on the terms and conditions, will be valid for three months. It is usually possible to get an extension if the property transfer is going slowly.

To arrange a mortgage, the property must be assessed by a certified appraiser. This must be an objective third party – not the buyer’s agent, the seller’s agent, or another interested party.

It is advisable to do this before you agree on a sale price, as this could be a key piece of information (even though this has become a feat in the current sellers’ market).

Structural surveys are typically not required to get a mortgage. Your lender can provide you with the full list of what an appraisal must cover. It’s a good idea to compare appraisers online before you get started – HuisAssist offers a handy tool to do this.

Once you have accepted a mortgage offer and filed the appropriate documents, you will sign the agreement and make an appointment with the notary (notaris) to sign the mortgage deed. This usually happens at the same time as the signing of the transfer deed. HuisAssist can also help you compare notaries near you in the Netherlands.

The National Mortgage Guarantee (NHG)

The NHG is a scheme that guarantees repayment of a mortgage, even if the borrower becomes unable to do so directly. It is only available for Dutch mortgages up to a certain value – €405,000 in 2023, and up to €429,300 if the home meets certain energy-saving standards. Should you become unable to repay the mortgage, the NHG ensures that:

• You are not liable for any sum over the value of your property when it is sold
• The lender is repaid in full

This means that if, for example, you become unemployed and can no longer repay your mortgage, your property will still be seized and sold.

However, if the value of your property is lower than the value of your mortgage (e.g., your home sells for €300,000 but your mortgage is €350,000), you will not be liable for the difference. The NHG reduces the cost of lending, and lenders in turn offer NHG participants a lower interest rate, typically up to 0.7% lower.

The application fee for the NHG is 1% of the mortgage value. This means that if you buy a property that costs €140,000 and put €40,000 down upfront, the mortgage value is €100,000 and the application fee is €1,000. The interest rates on NHG-backed mortgages are usually the lowest available.

How much are mortgage costs in the Netherlands?

As well as the price of the property and the mortgage repayments, there are other costs involved in taking out a mortgage. These are usually calculated with the value of the property, plus VAT (BTW in Dutch). However, some mortgage advice services charge a set fee (from €3,000 upwards) which included the fee to the mortgage provider.

Costs can include:

• Mortgage arrangement (Hypotheekadvies): Between €1500–3500
• Mortgage contract (Hypotheekakte): Between €456–600
• Notary charges (Notaris): Between €1,500–3,000
• National Mortgage Guarantee (NHG): 1% of the mortgage value (see above)
• Valuation fee (Taxatierapport): 0.2% (plus BTW) of the purchase price
• Transfer tax (Overdrachtsbelasting): 2% of the purchase price (see below)
• Insurance costs

How much are Dutch property taxes?

When buying a property in the Netherlands you must also pay a transfer tax which is 2% of the purchase price (6% for commercial buildings.)

Property tax in the Netherlands (onroerendezaakbelasting), is calculated on the deemed rental value of the property, otherwise known as the WOZ value, or immovable property tax. Each municipality determines its property tax rate, however, this generally ranges between 0.1% and 0.3% of the property value.

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If you rent out a property in the Netherlands that you own, the value of the property is taxed, minus the mortgage amount. This is taxed annually as part of your income from savings and investments.

Keep in mind that a higher WOZ value generally means higher taxes. However, those with a mortgage backed by the NHG can effectively lower their interest rates by entering a lower-risk category on the mortgage.

Tax-deductible costs

As long as you are paying taxes in the Netherlands, it is possible to claim a tax refund on mortgage interest payments. This is possible, provided the mortgage is a capital repayment mortgage (not an interest-only mortgage) and the property is your main residence.

Some of the costs listed above are also tax-deductible including:

• Valuation fee
• Mortgage broker’s fee
• Administrative charges for arranging the mortgage
• Notary’s fee
• NHG fee
• The mortgage interest

However, if you choose to rent out your property, you are no longer eligible for tax deductions on the mortgage payments. And of course, all tax deductions fall away if you are no longer resident in the Netherlands.

Additionally, it is worth looking into the 30% ruling, a tax exemption for internationals hired abroad to work in the Netherlands. This ruling may have a positive impact on your ability to get a mortgage or the amount you might be eligible for. At least it has a very positive effect on the amount of income tax you pay – so it’s a good idea to bring it up with a mortgage adviser.

Property insurance in the Netherlands

You will likely need to have proof of homeowners insurance (woonhuisverzekering) when getting a mortgage in the Netherlands. Some providers often offer a discount if you take out both your mortgage and home insurance with them. A standard policy covers fire, storm, flood, and theft, although the criteria can vary.

If you buy an apartment, the Association of Owners (Vereniging van eigenaren – VVE) generally arranges a home insurance plan. Apartment owners generally share the costs equally amongst each other.

Other types of insurance can affect your mortgage agreement in the Netherlands, including contents insurance and life insurance. A high-value contents policy (kostbaarhedenverzekering) is also mandatory to cover rare or expensive possessions.

Many insurance companies will offer a discount if you can present a BORG certificate – a document showing that your property has adequate protection against burglary and certified security equipment installed.

Providers of home and contents cover in the Netherlands include:

• a.s.r.
• Centraal Beheer
• Lemonade
• FBTO

Mortgage repayments

Aside from the set monthly credit and interest payments, it is also possible to make additional payments to reduce your interest rate. Most banks allow annual repayment of 10% of the original mortgage without a fine.

Doing so depends, however, on the type of mortgage you have. With an interest-only (aflossingvrij) mortgage, for example, you pay no repayments on the actual loan and only pay monthly interest. Making lump-sum or extra payments on this type of mortgage may carry penalties. However, if your mortgage allows for extra payments, the benefits of a longer-term lower interest rate can lead to real savings over time.

Refinancing a mortgage in the Netherlands

If you already own property in the Netherlands, refinancing your mortgage can be a great way to reduce your mortgage costs. This new mortgage repays your existing mortgage in full so you can start making monthly payments with a different plan.

Independent mortgage advisers have access to all lenders in the Netherlands and can compare rates and conditions for you to get the best deal. But there are downsides, too.

Here are some of the pros and cons of refinancing to help you make your decision:

Pros of refinancing a Dutch mortgage

• Lower monthly payments: Shopping around for a lower interest rate can help you reduce your monthly spending. A further discount on the interest rate may apply thanks to a lower loan-to-value due to increased property prices. These savings might be affected if you sell within a few years of refinancing.
• Reducing the term of your mortgage: If you opt to keep your monthly repayments the same, you could pay off your mortgage faster. For example, a 30-year mortgage could be paid off in 20 years.
• Transferring to a more secure mortgage: If you have a mortgage with a variable interest rate, where your interest rate fluctuates according to, for example, the Euribor rate, you could take advantage of low-interest rates by transferring to a fixed-rate mortgage. This will also help you avoid the risk of payments rising in the future.
• Accessing equity on your home: Taking out some equity from your property refinancing can help you cover a major expense, such as home improvements

Cons of Dutch mortgage refinancing

• Costs: The costs involved with setting up a new mortgage may offset any savings you might make from lower interest rates. They may include intermediary fees, compensation to your existing lender for loss of interest, and notary fees if you switch lenders.
• It can increase debt: If you refinance your mortgage to tap into home equity, it can be a slippery slope to ever-increasing debt, so you should make sure that you can cope with the extra financial responsibility.

Useful resources

• NHG – more information on the National Mortgage Guarantee in English
• Notaristarieven.nl – list of Dutch notaries