Expat mortgages in the Netherlands
Spotting your dream house is important but finding the appropriate finance is essential.
There have been many cases in which expatriates were not allowed to get the maximum amount and / or payments were unbearably high. Consequently, before start looking, get an indication of whether you can actually raise a mortgage.
As a first step, it is wise to conduct your own research throughout your network, rental agencies and newspaper advertisements (Woon section). Information on expat mortgages can also be obtained by banks, mortgage lenders or mortgage advisors.
Important notes about mortgages in the Netherlands
› Do not accept an offer just because the interest rate is not that high. A low interest rate is related but not necessarily correlated with low (net) monthly payments.
› "k.k." (Kosten te koper) implies that the buyer should add about 10 to 12% to the listed price for the real estate agent and notary fees, land registry fees and aproperty transfer tax (6% of the property value). Note that the vast majority of properties are sold with "k.k."
› "v.o.n" (Vrij op naam) indicates that purchasing costs are payable by the vendor and usually, apply to recently built houses.
› The cost of buying is about 8% of the purchase price. Therefore, be absolutely certain that you will not move out (at least) within the next three years to ensure you will not lose money due to inflation.
› Usually, a certain amount of guarantee or a 10% deposit is to be expected if you complete the purchase agreement (Koopovereenkomst) a couple of months after it is made official.
› Most Dutch banks and mortgage providers will allow you to borrow up to 85% of the buying price.
Basic requirements for Dutch mortgages
The basic requirements for a Dutch mortgage of up to five times of your annual gross salary include:
› Five-year permanent residency in the Netherlands.
› Full-time (permanent) employment or self-employment.
› Ability to produce accounts (by a recognised accountant) for the past three years as well as a prognosis for the current year.
› A valid residence permit. Even though it does not apply for EU citizens, some institutions still require it.
However, these general guidelines can vary and as always, special arrangements can be made.
Types of mortgages in the Netherlands
› Annuiteiten (repayment mortgage)
- Requires a certain amount of the mortgage on a monthly basis.
- Standard amount; repayment / interest ratios remain the same.
› Lineaire (repayment mortgage)
- Requires a certain amount on a monthly basis.
- Since you are paying off (higher initial payments), the amount of interest gradually decreases (lower payments towards the end).
› Aflossingsvrij (non-repayment mortgage)
Usually, not sufficient to cover your requirements and thus, most expats use it in combination with one of the following mortgage types.
› Spaar (investment mortgage)
Requires that you pay the interest on the mortgage amount and a premium (savings account).
› Belegging (investment mortgage)
Requires that you pay the interest on the mortgage amount and a premium (investment fund).
For more information regarding mortgages visit:
› Expat Mortgages