How to save money by investing in your Dutch home
It’s hard to miss the fact that life is getting more expensive in the Netherlands. Kenneth Leenders, the Chief Executive Officer of Expat Mortgages, explains how you can reduce your costs by making investments in your home.
In recent months, the inflation rate has been as high as 14,5 percent, affecting everything from your energy bill to your shopping expenses.
But now that the summer months are approaching - and your heating bill will drop - it might be a good time to look at what you can do to reduce your costs all-year round by energy-proofing your house.
If you do your research and calculate the sums correctly, investing a little money now could reap dividends in the long-term.
High cost of living in the Netherlands
We have all been experiencing that life [in the Netherlands] has become more expensive - whether it’s spending 30 percent of your paycheque on groceries, bars and monthly memberships or a doubling or even tripling of energy costs.
Thanks to the help of the government and a mild winter, we managed to keep energy bills at a reasonable level. But we don’t know what’s going to happen in the coming months regarding the terrible situation in Ukraine, and whether we are going to have a harsh winter in 2023. It can be wise to prepare, and one way to do that is to take some energy saving measures.
Some mortgage providers work with various companies that can look at your house or apartment and give recommendations on what you can do to better insulate it. It can range from the simplest measures, like using insulation tape (tochtstrip) to draft-proofing your windows and doors, or replacing your lights with LED.
Other energy-conserving measures could be investing in solar panels, double glazing, or floor / wall cavity insulation. Your municipality might also offer free advice and services like an energy coach.
Increase the value of your home by making green investments
Investigate the options you have for your house or apartment. There are different providers that are willing to offer people energy saving reports. Some of them even work with a couple of organisations who give discounts on these reports or sometimes do it for free, and they can then carry out these measures for you. It can really influence your monthly costs both directly and indirectly.
You will save on bills but energy saving measures could also mean the value of your property goes up, which sometimes means you are eligible for a lower interest bracket because your Loan to Value goes down. Let your adviser check your current mortgage and determine that you are in the correct bracket.
Improve your current energy label
A recent report from the NVM estate agents association suggests that if you improve the insulation of your property from a C label to an A label, this increases the value from between 3,5 percent to 8,7 percent (depending on where you live).
Improving the energy label from a G label (the lowest level) to a C label boosts the average value by 8,3 percent, according to brainbay (NVM real estate association).
Dutch sustainable energy subsidy
There are government subsidies of up to 15 percent for sustainable investments, with 350 million euros available in 2023 for measures like heat pumps or converting your gas stove to an electric one.
What you need to know before investing in your home
Before you start, check whether you are in the correct interest bracket for your mortgage right now. After you’ve settled that, see if it’s possible for you to borrow more money on your mortgage - although this will be at current interest rates and might be less than you could have borrowed in previous years.
More and more banks are willing to give a discount on your mortgage as soon as you have an energy label of A or higher. The energy saving measures you take could get you a discount with your bank, which is also good to know.
Get active in your homeowner’s association
If you live in an apartment in the Netherlands, you will automatically be part of a VVE or homeowners’ association. This means that parts of the building, such as the roof, may be communally owned. In this situation, there would be fewer energy saving measures you can take care of by yourself, and you would instead have to discuss it with the VVE.
It can be wise to at least show up to VVE meetings and make this part of the discussion - if it’s not on the agenda already. Make it a topic, because together with your VVE, it can make quite a difference if you live in an apartment. Just going from a C label to a B label can change a lot when it comes to saving costs. See if you can take energy saving measures together with the other homeowners.
Save the planet and your wallet
Be wise, take some advice and be smart about insulating your home because it could provide you with clean and affordable energy for years to come.
For expat mortgage advice, contact the friendly team at Expat Mortgages. They offer tailor-made advice and support for expats in the Netherlands.