7 questions answered about getting a Dutch mortgage in 2021

So you finally decided to buy a house in the Netherlands instead of renting. Great! Congrats to you, that’s a very grown-up move indeed. Now simply make a bid on that house, get it accepted, and walk to the bank with a few hundred thousand euros in cash to buy your house in the Netherlands.

Wait, what’s that? Don’t have that kind of money stashed away? Then you’ll probably need to get a mortgage. While there are certainly simpler things in life, getting a mortgage in the Netherlands doesn’t have to be a daunting endeavour. Here are our answers to seven burning question every expat needs to ask before securing a Dutch mortgage.

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1. Who can get a mortgage in the Netherlands?
2. What are the (upfront) costs of a Dutch mortgage?
3. What are the Dutch mortgage rates?
4. What type of Dutch mortgages are there?
5. What is the National Mortgage Guarantee aka ‘Nationale hypotheek garantie’?
6. How much can I borrow for a mortgage in the Netherlands?
7. I want a Dutch mortgage! Where do I start?

1. Who can get a mortgage in the Netherlands?

If you’re planning to buy a house in the Netherlands, then it might be good to know if it’ actually possible at all. And often, more is possible than you think — whether you’re employed or have your own business.

The great thing is that having a different nationality is often no longer an obstacle to getting a Dutch mortgage. Whereas in the past, banks were hesitant to give out mortgages to internationals, we now see that more and more mortgage suppliers are adjusting their criteria for obtaining a Dutch mortgage to the situation of you — internationals — reading this.

TIP: Getting a mortgage as an international in the Netherlands is easier than ever but if you’re unsure whether you’re eligible, our friends over at Expat Mortgage Platform can help you figure out what you need to do to get a mortgage on your dream Dutch house.

Getting a mortgage in the Netherlands: criteria and factors

There are several points of attention that have an effect on the possibility of obtaining a mortgage in the Netherlands and the amount of money that’s involved in it. Just think of the all-round background of the customer or the work situation (yes, permanent contracts are good, but getting a mortgage in the Netherlands is still possible when you’re on a temporary contract).

READ MORE | Can you get a mortgage in the Netherlands as an expat? (With a college debt? Or as a freelancer?)

The one condition that applies to every bank and everyone applying for a Dutch mortgage is that you must live in the Netherlands. If you want to buy a house and need a mortgage, then this house must be located in the Netherlands and you must be registered at a Dutch address. If you have a BSN number then things just got a whole lot easier.

Obviously, for a Dutch person, this is all easy-peasy. If you come from the EU or EEA then you still need the registration and a BSN, but otherwise, there are no additional requirements. But don’t worry, if you’re not from the EU it’s still very possible to get a mortgage in the Netherlands!

photo-of-a-typical-dutch-house
Start dreaming about buying that house! Image: Alex Dudar/Unsplash

We checked in with Melissa Zahaf from Expat Mortgage Platform to get the expert view: “You have to take into account that there is a smaller pond of money lenders for us — mortgage lenders — to fish in if you’re an expat trying to get a mortgage in the Netherlands.

This is because there are certain exceptions and rules at the banks when it comes to expats. Particular attention is paid to the length of stay in the Netherlands (and how long you have already been living here). And, to a lesser extent, employment history — mostly focusing on whether you’re a regular employee or an entrepreneur, how long you been working here, and if you have a permanent contract or not.

If you have only lived and worked in the Netherlands for a few months, it is already possible to apply for a mortgage and we can already compare a few lenders. If you have lived and worked in the Netherlands for a number of years, then the pond with money providers is already a lot bigger!”

2. What are the (upfront) costs of a Dutch mortgage?

You may be wondering whether you need tons of money already in order to get a mortgage in Holland (yes, we’re talking about you Germany, with your 70% financing mortgages!). In the Netherlands, you can get financing of up to 100% of the (market) value of your house. So if the value is €300,000, you can get a mortgage for as much as €300,000. Sounds pretty good right?

However, keep in mind that you will have to bring some of your own money to the table as there are several costs involved in buying a property that can’t be financed by a Dutch mortgage (although a mortgage intermediary can sometimes help with this). These are some of the costs you should expect to pay out of pocket:

What is it that I need to pay?How much will it cost me?
Transfer tax2% of the sale price of the house; ‘starters’ up to the age of 35 are exempt from the transfer tax if the house price is less than 400K
Fee for the appraisal/valuation report — required to get a mortgageA few hundred euros
Arrangement fee for the mortgageDepends on the mortgage provider
Fee for the notaryBetween 1,500 and 2,000 euros; the fee includes VAT and a translator
Structural survey (optional)A few hundred euros
Real estate agent (optional but advisable)Between 1,000 and 2,000 thousand euros

As a rule of thumb, the costs of buying a house in the Netherlands will be roughly 4% to 6% of the buying price. You can read more about these costs here.

In my experience, most of the costs involved were paid at the notary office, so, all in all, it was a pretty clean and ‘overseeable’ deal. Another plus for the Netherlands is that the costs of obtaining a mortgage are also tax-deductible. Think of the advisory- and mediation costs, the valuation report, mortgage deed at the notary, and the possible costs for the NHG (covering that at #6). In my personal situation, we paid like 6K and had 3K returned to us after a few months through a voorlopige teruggaaf — first time I was ever happy with the taxman!

3. What are the Dutch mortgage rates?

The Dutch mortgage rates (and mortgage rate tax deduction) are one of the primary reasons why everybody has been nagging you that it’s smart to buy a house in the Netherlands right now.

We’ve asked Melissa to pitch in on mortgage rates: “For years now the mortgage rate has been at an all-time low number. Years ago the rate started its descend, caused by all kinds of monetary reasons such as the ECB keeping the international rates down throughout Europe. Because rates are low all across the board, your savings aren’t making any money and it’s even more interesting to buy a house in the Netherlands.

Everybody kind of thinks that the rate won’t go any lower so now it’s a popular option to set your mortgage rate on a fixed level for a long period of time (so it won’t get bumped up to like 7% in 2026 for example). Mortgage rates are important especially in the Netherlands because you can get a refund of some of the monthly costs from the tax office. This process is called the mortgage interest tax deduction aka hypotheekrenteaftrek.” As a homeowner, I can say it’s a nice thing that will definitely help with paying the mortgage. Our mortgage is €880 per month and we get €110 back on a monthly basis.

TIP: The mortgage interest rate process can be pretty complicated, which is why you might want to reach out to a mortgage intermediary such as Expat Mortgage Platform. They can also tell you more about the different kinds of mortgages in the Netherlands.

4. What type of Dutch mortgages are there?

There are quite a few types of mortgages in the Netherlands, but the most common ones are the annuity mortgage (annuïteitenhypotheek) and the linear mortgage (lineare hypotheek). These two kinds of mortgages are also the only kinds that are eligible for the interest tax deduction, which is the thing you’re aiming for.

Linear mortgage

With a linear mortgage (lineaire hypotheek) the amount of debt that you pay remains fixed every month. On top of the debt, you will also pay interest, which will be the highest at the beginning of the mortgage since you haven’t paid anything back yet.

At the beginning of a linear mortgage, the costs are high, but they will gradually decrease — and therefore paying off your mortgage in the Netherlands goes the fastest if you opt for this kind of mortgage.

A linear Dutch mortgage. Image: Expat Mortgage Platform/Supplied.

The disadvantage of the linear mortgage is that you pay a higher amount at the beginning of the mortgage and most of the time, this is the period in your life when you’re making less money than later in life. The benefit of a linear mortgage is, however, that the total amount paid overall is much lower because you pay less interest as you start to pay off the actual sum immediately.

Annuity mortgage

With an annuity mortgage (annuiteiten hypotheek) you will pay the same amount over the whole period of the mortgage. In the beginning, this amount is mainly interest and only a small part of the loan. Gradually, this changes, so that at the end of the mortgage you will mainly repay your loan.

An annuities mortgage. Image: Expat Mortgage Platform.

With an annuities mortgage, you usually have lower monthly payments in the early years of the mortgage period than with a linear mortgage. The high amount of interest can be deducted from taxes, which makes your net monthly cost low at the beginning of the mortgage. The downside of an annuity mortgage is that you will pay more interest compared to a linear mortgage and in the long run, pay overall more than with a linear mortgage.

For what’s it worth, I went for the annuity mortgage. Don’t worry too much, a good mortgage advisor can advise you way better than yours truly about what kind of mortgage to choose in the Netherlands.

5. What is the National Mortgage Guarantee aka ‘Nationale hypotheek garantie’?

If you’ve been planning to buy a house for a while now, you’ve probably come across this complex term called National Mortgage Guarantee a few times. Here in the Netherlands, we like to call it the NHG. But what does it actually mean?

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. It will cost you one percent of the mortgage amount. However, you’ll earn your money back quickly because lenders offer much lower interest rates if you opt for the NHG when sealing your Dutch mortgage. Oh, and by the way — that one percent is tax-deductible!

It’s not a play-it-safe party for anyone though, as the NHG is only available for mortgages in the Netherlands that are at a maximum of 325,000 euros in 2021.

Dutch mortgage
And because you need a place to live in the Netherlands, and these beauties will last longer than your mortgage in the Netherlands. Image: baillif/Pixabay

Should you lose your job or should something else awful happen to you, 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). Alternatively, if you do need to sell, the NHG will cover the debt that’s left (this is when the selling price is lower than the mortgage amount due, doesn’t really happen in the Randstad anymore with the rising housing prices, unfortunately).

READ MORE | Rent or buy a house in the Netherlands? What you need to know in 2021

So in short, you’ll pay less per month since the mortgage rate is like one percentage point less, you’ve got a guarantee for the worst-case scenario and you can deduct the cost from the taxman! Getting the National Mortgage Guarantee was a no-brainer for me and it should be for you too, provided you’re buying under the 325K limit.

6. How much can I borrow for a mortgage in the Netherlands?

Ah! The million-dollar question (more like a 200-500K question really — sorry for that joke): how much can you borrow for a mortgage in the Netherlands? The most important factor that determines how much you can borrow is your income — no surprises there. But there are also plenty of others. What are they?

Risk factorAre you a regular employee or an entrepreneur? Do you have a permanent contract, a fixed one, or a letter of intent from your employer? Or, alternatively, how long have you been an entrepreneur? The less risk, the better for your Dutch mortgage.
Are you buying with a partner?The income of your partner will be included in the mortgage plan. It helps if you’re married or registered as partners. The second income isn’t taken into account for 100% though. It is, however, counted for 90%.
House valueYou cannot finance more than 100% of the house value. This means that in general, the costs are for the buyer (kosten koper). Take this into account when you bid on a home (and certainly if you offer above the asking price) – you need a couple of thousand euros in your pocket at least when buying a house.
Interest rateWhat is the interest rate? This, of course, includes a fixed-rate period and whether it’s with or without the NHG.

How much can your Dutch mortgage be?

The Dutch Institute NIBUD has determined the amount one can borrow with a specific income. All lenders use these figures, so these rules apply to everyone. What is still important when it comes to the maximum mortgage amount is that if you have bad credit or student debts, this has a negative impact on what you can borrow. The good news is, however, that student debts are seen as less heavy than credit card debts and such.

7. I want a Dutch mortgage! Where do I start?

You read the article and now thinking — hey, I can get a mortgage in the Netherlands, it’s not the distant utopia I first thought! So how do I get started? Here are a few simple steps you can take right now:

Step 1: Get a rough idea of how much you can borrow for a Dutch mortgage.
You can’t be buying a house without knowing your budget! There are plenty of deciding factors that determine your mortgage amount and often there’s more possible than you would think. Expat Mortgage Platform has an excellent tool for calculating your potential mortgage in the Netherlands.

Step 2: Reach out to a mortgage advisor
If you’re a bit more serious about obtaining a mortgage in the Netherlands then Melissa and her co-workers at Expat Mortgage Platform are happy to help you with a personal conversation to explore your possibilities for a mortgage in the Netherlands.

I can really recommend using an intermediary for securing a Dutch mortgage. Especially if this is your first time buying a house in the Netherlands. That way you don’t have to deal with the bank together, they get you the best rates and there’s somebody to hold your hand — figuratively speaking — with what is arguably the biggest deal of your life. They also know the situation at all banks and lenders, which is good because who wants to depend on the advice of just one bank?

The first conversation with a mortgage intermediary like Expat Mortgage Platform is for free and with no strings attached. It’s always a good idea to do this since an explanatory conversation like this will make things a lot clearer. In case you do decide to let Expat Mortgage Platform help you out with securing your mortgage in the Netherlands, they will go for that tailored approach you need, guiding you on every step of the way — from purchase to the sealing of the deal at the notary and everything in between.

In case you’re wondering, most Dutchies use an intermediary as well since this stuff is complicated! Expat Mortgage Platform also gets you all the explanations and documents in English. Get in touch with them and set up a meeting right now by filling out their contact form, giving them a call, or sending a WhatsApp. You can also check out their Instagram page and be inspired by other new homeowners!

That’s it for now on getting a mortgage in the Netherlands. Good luck and let us know about your endeavours!
Feature Image: baillif/Pixabay

Abuzer van Leeuwen 🇳🇱http://www.abuzervanleeuwen.nl
Founded DutchReview. Rotterdammer living in Leiden. Politics, innovation and epic food-reviews are his thing. Interested in doing anything with DutchReview? Contact him at abuzer[at]dutchreview.com

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8 COMMENTS

  1. I find it interesting, as well as frustrating, that nobody mentions the fact that the age of the person has an effect on mortgages in the Netherlands, and the problems for expats who are within 10 years of retirement.

  2. Another important missing topic is that it is necessary that you need an income in euro, not in an currency like the US dollar. That is because of European legislation. In order to protect you as a customer, banks are not allowed to provide mortgages in another currency than the currency of your income. Dutch banks cannot handle currency risks in their standardized mortgage products. The banks all choose to offer mortgages in euro only.

    For people working for international companies with salaries not in euro, a change in their contract often is the best solution. So you’ll might work for the Dutch subsidiary for the time that you work and live here in The Netherlands.

  3. Nothing is mentioned about letting out the house one buys as one is working in an EU country. Is that possible? are there different rules in each bank? how does it work?

  4. Nothing is mentioned about letting out the house one buys as one is working in an EU country. Is that possible? are there different rules in each bank? how does it work?

    +1 on this question!

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