Expat mortgages in the Netherlands
Spotting your dream house is important, but getting the appropriate finance is essential.
There are many ways to find a house, including looking at online sites, through rental agencies or in newspaper advertisements (Woon section). Information on expat mortgages can also be obtained from banks, mortgage lenders or mortgage advisors.
Basic requirements for Dutch mortgages
Banks generally insist on borrowers having a permanent employment contract. If you only have a temporary contract, they will require a statement from your employer that your position will become permanent.
If you are self-employed, you must generally provide your bank account(s) and income tax returns for the previous five years. Banks may be flexible, however, depending on your profession.
If you are an EU citizen (but not a Dutch national) banks may also require that you have lived in the Netherlands for a minimum of three to five years and you have a reliable employer.
Applicants from outside the EU have further requirements. Firstly, banks may not offer you the maximum mortgage amount, and they may stipulate that you have had the same employer for five years and that you have an unrestricted residence permit.
Important notes about mortgages in the Netherlands
› Mortgages can be taken out directly from a bank (or other institution) or through an intermediary. Choosing an intermediary does not necessarily result in extra costs compared to dealing directly with a bank, as banks often charge a 1 per cent commission on a direct loan anyway.
› "k.k." (kosten te koper) means that all costs associated with buying a house, such as real estate agent and notary fees, land registry fees and property transfer tax, are not included in the price. These costs usually amount to around five per cent of the listed price. Note that the vast majority of properties are sold with "k.k."
› "v.o.n" (vrij op naam) indicates that extra costs (set out above) are included in the listed price. This more usually applies to recently built houses.
› The deposit on a property is usually 10 per cent of the purchase price, paid a few days after the purchase agreement (koopovereenkomst) has been signed. This may be replaced by a bank guarantee issued by a Dutch bank.
› In 2013, you may borrow up to 105 per cent of the market value of the property. This amount is decreasing, following new government regulations, and in 2018 the full maximum mortgage amount will be set at 100 per cent of market value.
Types of mortgages in the Netherlands
› Annuiteiten (annuity mortgage)
You pay a fixed gross amount per month over the duration of the load, with repayments comprising both interest and capital repayments. This means that by the end of the loan period, there is little interest left to be paid.
› Lineaire (linear mortgage)
The repayment component remains the same over the duration of the loan, which means that both the gross and net payments are higher at the start and drop during the course of the loan.
These loans are not as popular in the Netherlands as the tax benefits decrease over the course of the loan. This is less of an issue for expats, however, who are only intending to live here temporarily.
› Aflossingsvrij (interest-only mortgage)
You pay only the interest, leaving the principal until after the loan expires. It can also be paid off during the loan period. As nothing is agreed concerning the capital repayment, many banks are not prepared to offer a maximum mortgage as interest only.
› Spaar (endowment mortgage)
This mortgage is combined with life insurance. Monthly expenses consist of interest (on the mortgage) and the life insurance premium.
› Bankspaar (bank-saving mortgage)
Repayment is based on a savings account, which provides a single guaranteed payment at the end of the loan period that is used to either partially or fully repay the mortgage.
› Belegging (investment mortgage)
This can be paid off in full or in part through an investment fund. It therefore involves both a mortgage and an investment account, this last which must be offered to the bank as security.
› Spaarbeleggin (savings investment mortgage)
This is a combination of an endowment and an investment mortgage, also called a hybrid mortgage. It allows you to change the balance between savings and investments over the course of the loan.