I am looking for a house but can I get a mortgage as an expat?

I am looking for a house but can I get a mortgage as an expat?

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You are considering buying a house or maybe you have visited a couple of houses already. Perhaps it took you a little longer to find the right house and you have visited hundreds of potential homes.

Maybe you are getting tired of spending hours on Funda and almost having nightmares about the real estate agent that you shook hands with for the umpteenth time. Either way, you will probably need a mortgage to be able to live in your dream house, because eventually, you are sure to find it.

Getting a mortgage is one of the most common things you must do when buying a house, but it takes time and a bit of effort to find the right one. There are a lot of rules involved and, on top of that, each bank has its own rules concerning mortgages.

Getting a mortgage: Simpler than you think?

So, is that cry for help justified, or is it way simpler than you might think? It's most likely the latter. Though the mortgage application is quite a big deal, there are specialists that can help you during the entire process.

Getting the help of a specialist might save you a couple of thousand euros, since they can compare virtually all lenders, whilst a bank only offers their own mortgage products. Besides, if you get a “no” from one or two banks, that doesn’t necessarily mean that a mortgage is not possible. Going to an experienced mortgage broker who can tell you what your options are will save you time, effort and a lot of frustration. 

Can I actually get a mortgage?

Having said that, your main concern is probably: “Can I actually get a mortgage?” There are some key factors that are involved when it comes to getting a mortgage and what your maximum mortgage could be:

  1. Nationality
  2. Type of employment
  3. Income
  4. Loans
  5. Your new house

1. Nationality

Are you from the Netherlands, France, South Africa or India? While these are all very nice countries, in the eyes of a mortgage provider they are all very different when it comes to the rights afforded to people with these nationalities. If you are from the EU or EEC (such as Norway or Switzerland), most banks do not have additional criteria.

However, things are a bit different if you do not have an EU nationality. In some cases, you need to have lived and worked in the Netherland a number of years before being granted a mortgage.

2. Types of employment

Are you self-employed or working for a company? And do you have a temporary contract or a permanent one? All of this has an influence on the maximum mortgage amount you are eligible for. If you are self-employed for one year or longer, there are possibilities when it comes to a mortgage. The same is true for having a temporary contract if your employer has the intention to turn your contract into a permanent one.

3. Income

It comes as no surprise that the maximum mortgage amount will be determined by looking at your income. The higher your income, the more you can borrow, but on average it is around 4,5 times your gross annual salary / income. Example: If your income is around 50k per year, your mortgage amount will be roughly 230k. If your income is 100k per year, the maximum mortgage will be around 560k.

Recently, we received the sad news that the 30% ruling, a tax benefit for expatriates, will be shortened to a maximum of five years (it used to be eight). On the bright side, most mortgage providers do not take the 30% ruling into account. And the ones who do will take this new law into account.

Be aware that receiving an income in a currency other than euros has a big influence on your mortgage possibilities. Almost every Dutch bank demands an income that is in euros. Is it impossible then? No. But your income will be converted into euros and only 90% of that income will be used to determine your maximum mortgage.

4. Loans

There is a saying in the Netherlands about loans: “The best loan is no loan at all!” But should you have any outstanding loans, they will have a negative impact on the maximum mortgage amount that you can borrow. Per 1.000 euros loaned, the maximum mortgage amount will decline by roughly 5.000 euros. So, it really pays off if you do not have any outstanding loans.

If you do have one, maybe you can pay off the loan or terminate the loan contract if you aren’t in the red (in the case of a revolving loan).

5. Your new house

You have probably heard about the 100% loan to value, which means that you can borrow 100% of the property value.. When you buy a house, it needs to be appraised. A valuation report will be made by an independent valuator, which contains the market value. That market value is a determining factor when it comes to the maximum mortgage amount. So far, it is unknown what will happen with the loan to value ratio (in the past years it has declined by 1% each year). Still, in other countries the ratio is (far) beneath 100%.

Bottom line is, there are two ratios involved when it comes to the maximum mortgage: loan to income and loan to value. The lowest of the two will determine what the maximum mortgage for that specific house will be.

When you buy a house, other costs are involved as well as the purchase price; however, now you can only receive financing for 100% of the market value. Maybe you have excellent negotiation skills and purchase the house at a price a little lower than the market value. If this is the case, you can finance the difference and keep some money in your pocket to do some furniture shopping or keep it in your bank account in case you need it.

Some costs are unavoidable, and you just have to deal with them. When buying an existing building, you need to pay transfer tax (2% of the purchase price), the valuator, the civil-law notary, the mortgage broker and (optional) your real estate agent and the structural surveyor. Typically you have to pay 4-6% for extra costs out of your own pocket. The bottom line is that it is relatively easy for an expat to obtain a mortgage. 

Are you interested in a chat about your possibilities, or do want to learn even more about Dutch mortgages? The advisors at MortgageMonster are keen to help you out with the whole mortgage process and pave the road to a smooth transfer to your new home.

Jan Thomas  Fokkens


Jan Thomas Fokkens

Since 2010 I am working in the Dutch Finance branch and for the past years I have been taking care of mortgages. Starting at the back office, I was able...

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MikeCampion 15:04 | 14 May 2018

Interesting article. However as a Brit living in NL, Dutch wife and children with the intention to settle here for the long term, I have been informed by 3 banks I have spoken with that, since Brexit, we cannot get any mortgage unless our income is solely derived from an EURO source outside the UK. I have made changes and closed business in the UK and am now growing investments in NL. However, despite having 50% to put into a home, we would still need to wait for 3 years. Stuck renting till then. In short, if you are a Brit and don’t have 3 years of books or employment record, its tough luck! I am still looking to be proved wrong??