So you’re thinking about buying a house in the Netherlands in 2022, right? Well, it’s safe to say that the world isn’t the same as it was in 2021.
This can also be said for the Dutch housing market — and the rules for getting a mortgage in the Netherlands.
It’s fair to say that you absolutely need to know about these changes if you’re serious about buying a property in the Netherlands. We jumped on a call with Roy Bijkerk from Expat Mortgages to get an expert’s breakdown of the situation.
Dutch mortgage interest rates are rising again
Perhaps one of the most notable changes in the Dutch mortgage landscape in 2022 can be seen when we look at interest rates.
Namely, after years of record-low mortgage interest rates, the Netherlands is seeing a rise once again. Roy gives us all the facts:
“By the end of 2021, a 10-year mortgage had interest rates at around 1.45% and a historically low 1.00% with National Mortgage Guarantee” (Not sure what the NHG is? No worries, we’ll explain all this later on).
In July 2022, this same mortgage type has rates of 4.10% and 3.70% with NHG — meaning an increase of approximately 2.65% and 2.70% with NHG.” All of these rates concern mortgages of 100% Loan to Value (LTV).
So, what does this mean for hopeful homeowners? Put simply, it means that your mortgage is going to cost you more in 2022 compared to 2021. Roy offers us an example:
“The interest for a 10-year fixed mortgage plan has risen from 1.00% to 3.70% since January of 2022. Under this, if your mortgage was €300,000 and you previously paid €965 per month, that’s risen to nearly €1,380 per month.”
If more money has to be set aside in order to pay interest, then you have less money to put towards the buying of a house. This means that the amount the bank can approve for you to borrow will be less in 2022 compared to 2021.
Inflation is causing borrowing power to decrease
Speak of the devil! (a.k.a borrowing power). In 2022, your borrowing power will be reduced further due to rising inflation rates. Since January of 2022, the cost of living in the Netherlands has risen by a whopping 10%.
In theory, this could have a knock-on effect on your borrowing power, making it less powerful in 2022 compared to 2021.
However, in practice, this might be a bit different. That’s because mortgage lenders will often take economic changes into account when determining your borrowing power.
READ MORE | Your borrowing power for a Dutch mortgage in 2022
Speaking with De Volkskrant, one econometrician explains that “We process changes in an average of four years. Whether it is an economic shock or a new tax measure, we try to dampen the effect somewhat.”
New builds are becoming more and more popular
The Netherlands is known for its charming canal houses. However, when it comes to buying a home, a more practical new build home is becoming an increasingly popular option.
READ MORE | Buying an old vs. new house in the Netherlands: the key differences
This is for a number of reasons. Firstly, in most cases, hopeful homeowners can avoid entering a vicious bidding ring in order to secure their dream home. Instead, applicants are chosen from a lottery pool.
Secondly, improvements in gas, insulation, and electricity often make new builds a more sustainable option for buyers. In a new build, you can enjoy lower monthly costs — a big plus in an age of rising gas prices.
On top of this, as of 2022, those who are willing to implement energy-saving measures in the construction of their homes will be able to borrow an extra €9,000 as part of a new government scheme.
More people are moving from the cities to the countryside
While society may be slowly returning to normal, the effects of coronavirus on the Dutch housing market can still be seen in 2022. Namely, where people want to live.
More and more Dutchies are ditching the bustling city centres and their surrounding suburbs for something a bit further afield — the Dutch fields and villages to be exact.
READ MORE | Sustainability, remodelling, and your mortgage in the Netherlands
Roy tells us that coronavirus has changed people’s preferences to start hunting for housing in areas on the outskirts of major cities.
“People are just appreciating their home more than ever,” Roy explains to us. “It’s been a home but also an office, school, and holiday address. And the working from home trend looks like it’s here to stay.”
Of course, the trip to work takes longer. But nowadays we no longer have to be in the office every day, so the commute might be longer, but less frequent.
The government aims to build 100,000 new houses this year
One huge contributing factor to the Dutch housing crisis is the fact that the Netherlands is currently experiencing a huge housing shortage.
How huge? It is estimated that around 300,000 homes have to be built in order to ease the current pressure.
While this certainly won’t be a quick fix, the new cabinet is hoping to tackle the issue, guns a-blazing. As part of Rutte IV’s proposal, the Dutch government aims to build 100,000 new homes in 2022.
However, whether this is actually achievable is another question. Some experts are sceptical, pointing to a shortage in both labour and land. For context, just under 70,000 houses were built in the Netherlands last year.
That being said, it’s always a relief to see that the housing shortage is being acknowledged — let’s hope it leads to some action.
The NHG has risen to €355,000 in 2022
In the Netherlands, hopeful homeowners can apply for what is called the ‘Nationale Hypotheek Garantie’ or National Mortgage Guarantee (NHG).
The NHG is a protection against any debt that still stands if you can’t pay your mortgage due to involuntary unemployment, divorce, or the inability to work.
In exchange for 0.6% of the mortgage amount, the people at the NHG and your bank will try to find solutions so that you are able to stay in your house (instead of selling it), should any of the above happen.
If you do have to sell your home and the unbelievable happens (it sells for less than the mortgage price), then the NHG will cover any debt that’s left.
However, there’s a limit to how high your mortgage can be in order to benefit from the NHG. IN 2021, homeowners had to have a mortgage of less than €325,000, however, in 2022, this has risen to €355,000.
Serious about buying a house in the Netherlands? Ready to snag your Dutch home in 2022? Head over to the experts at Expat Mortgages to find out about your borrowing power, options, and possibilities. Their friendly mortgage advisors are the pro’s at helping internationals (just like yourself!) buy a home in the Netherlands. Reach out to Expat Mortgages to find out more!
Are you looking to buy a house in 2022? Tell us in the comments below!
Thanks for helpful share! I would like to share this article to my FB wall. I think there are some people who want to buy house in Netherlands in this year must read this.
What qualifies one as a Ex-Pat
Dear expats, please do not buy up our homes. And please don’t overbid above the asking price at all.
Our children need’s to live somewhere too.
Is salary to be consider when asking for tax deducting for mortgage interests?