Dutch mortgage interest rate expectations for 2025

Mortgage interest rates have remained relatively stable between 4% and 5% from early 2023 through mid-2024. As we enter the final quarter of 2024 and rates begin to decline, it’s a good time to assess what the coming months and 2025 might bring. While predicting future rates can be challenging, we generally advise fixing your mortgage rate for a shorter term when rates are high or falling. On the other hand, if rates are low or expected to rise, opting for a longer fixed term is often wiser.

Unusual Interest Rate Patterns in 2024

 

In 2024, shorter fixed-term interest rates, like variable rates and 1- or 3-year fixed terms, were often higher than medium-term rates such as 5- or 10-year fixed terms. This “inverted” rate structure is uncommon since longer-term rates usually carry a premium due to the added security they provide. Looking ahead to 2025, what can we expect in terms of mortgage interest rates?

Inflation Trends in 2024 and 2025

 

Mortgage interest rates are closely linked to inflation. In 2024, inflation has gradually normalized following the significant spikes of the past two years. However, wage increases driven by union negotiations and high demand for workers have slowed the decline. Currently, inflation within the European Central Bank (ECB) zone stands at 1.8%, slightly below the ECB’s 2% target. The ECB’s goal now is to maintain inflation close to 2%, without letting it drop much further.

Capital Market and Interest Rates

 

As the economy cools, inflation continues to decrease. In August 2024, the ECB reduced its interest rate by 0.25% for the first time since 2020. The forecast for the remainder of 2024 includes another 0.25% reduction, with projections for 2025 suggesting three or four additional 0.25% cuts. This could result in a total rate reduction of around 1% by the end of next year.

Mortgage Interest Rate Outlook for 2025

 

Mortgage advisors closely monitor capital markets and 10-year government bonds, which serve as key indicators for longer-term mortgage rates. In 2024, these rates have hovered between 2.5% and 2.9%, indicating little movement in long-term mortgage rates. Meanwhile, the ECB Euribor rates, which affect shorter-term interest rates such as variable, 1-year, and 3-year rates, have dropped from 3.9% to 3.2%. As a result, major Dutch mortgage providers like ABN AMRO, ING, Rabobank, and Obvion have reduced their rates for shorter fixed terms. Looking ahead, we anticipate that shorter-term rates could fall by an additional 1% in 2025, while longer-term rates may decline by around 0.5%.

Is Now a Good Time to Buy a Property?

 

With mortgage interest rates falling and incomes rising, the Dutch housing market is seeing renewed pressure on prices. Rabobank projects a 10% increase in property values for 2025. In some cases, properties in popular locations or with unique features are attracting bids well above their asking prices, with overbidding amounts of €50,000 to €125,000 becoming common again.

However, not all properties are experiencing the same level of demand. Some homes remain on the market longer, allowing room for price negotiation. For first-time buyers, particularly those with lower to moderate incomes or single-income households, the current market can be challenging. In contrast, higher-income buyers, families with dual incomes, or those who already own property are finding conditions favourable for purchasing. All in all, if you’re an expat and planning on living in The Netherlands for a longer period of time, we think it makes more sense to buy a home.

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    National Mortgage Guarantee (NHG) limit increases to € 450,000 and participation becomes cheaper

    The Dutch National Mortgage Guarantee (Nationale Hypotheek Garantie, or NHG) is set to undergo changes in 2025, as the maximum mortgage limit will increase to € 450,000. Additionally the cost of enrolling in the NHG program will be substantially reduced from 0,6% of the mortgage amount to 0,4%. This will make it up to €1,000 cheaper for homebuyers to participate in the scheme.

    Higher NHG limit for mortgages

     

    NHG is a financial safety net designed to protect homeowners who face difficulties in paying their mortgages due to unforeseen circumstances, such as passing away of a partner or divorce. At the moment NHG covers mortgages up to € 435,000. However, from 2025, the NHG limit will be raised to € 450,000. This increase reflects the rising house prices across the Netherlands, providing more homeowners access to the program.

     

    Moreover, if homeowners take energy-saving measures such as installing insulation, solar panels or HR++ windows, they will be allowed to borrow even more. In these cases, NHG limit will be raised to € 477,000, encouraging sustainable home improvements.

     

    NHG as a safety net for homeowners

     

    The primary purpose of the NHG is to protect homeowners from being burdened with residual debt if they can no longer meet their mortgage payments. If homeowners fall into financial distress, a mortgage advisor can possibly provide more assistance to work out an arrangement that allows the homeowner to remain in their home.

     

    NHG also provides an advantage by reducing the interest rate homeowners pay to the bank. This is because the Dutch government guarantees the NHG, which lowers the risk for banks, translating into lower interest rates for borrowers. Often the interest rate is with NHG is 0,5% lower vs the rate of a regular mortgage when financing 100% on the value of the property.

     

    Reduced participation costs

     

    One of the key changes coming in 2025 is the reduction in the fee homeowners must pay to participate in the NHG scheme, known as the guarantee fee or “borgtochtprovisie.” This fee will be reduced from 0.6% to 0.4% of the mortgage amount. For someone taking out a mortgage at the new maximum limit of € 450,000, this reduction translates into savings of approximately € 1,000.

     

    NHG’s widespread usage and growing fund

     

    Around 40% of all homeowners in the Netherlands have a mortgage secured with an NHG guarantee. Despite the growing popularity of the NHG program, it is notable that the increase in the NHG limit does not fully keep pace with the rapid rise in housing prices. While the NHG limit is set to rise by about 3.5%, house prices in 2024 have risen by approximately 12%.

     

    The reason for this discrepancy is that the NHG limit is calculated based on house prices from the past 27 months, which are lower than current market values. As a result, the NHG cap doesn’t fully align with today’s housing costs, potentially leaving some homeowners outside the program’s coverage range.

     

    NHG’s expanding role

     

    The rising house prices have also resulted in a growing reserve fund managed by NHG. This fund, which now stands at € 1.7 billion, is set aside to assist homeowners in financial distress. In 2023, only 30 homeowners who encountered mortgage problems required help from this fund. As the reserve continues to grow, NHG is exploring new ways to use the money to address broader housing challenges.

     

    Conclusion

     

    The changes to the National Mortgage Guarantee in 2025 aim to make homeownership more accessible and affordable for Dutch buyers, especially given the rapid increase in house prices. The higher mortgage limit, combined with lower participation costs, provides a stronger financial safety net for homeowners. As of the end of December 2024 home buyers can make use of the new NHG limit and lower fee. If you want more information reach out to us to schedule a call with one of our mortgage advisors.

    Request a free intake meeting

     

    If you would like to discuss the current housing market and mortgage landscape, you can always reach out to us or to Nick from Your Dutch Home for an online intake session. These sessions are always free of charge.







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      On a mission to buy a house in the Netherlands? Let us help you get
      the keys to your new home!

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      Housing prices in the Netherlands: highest increase in two years

      Housing prices in the Netherlands have seen another significant increase over the past month. Buyers paid, on average, 11.4% more for a home compared to the same period last year, marking the largest price increase in two years. This steep rise is especially evident in the province of Utrecht.

      Average Home Prices in the Netherlands

       

      According to recent data from Statistics Netherlands (CBS) and the Land Registry (Kadaster), the average price paid for an existing home last month was €466,890. These figures focus solely on existing homes, with newly built properties being excluded from the analysis.

       

      For years, house prices in the Netherlands have been on an upward trajectory, driven by high demand and a limited supply of available homes. The only exception was the period between mid-2022 and mid-2023, when price increases temporarily slowed. However, after this brief pause, the prices started climbing again, with current prices now standing nearly 7% higher than the previous peak in July 2022.

       

      Regional Variations: Utrecht Leads the Way

       

      The rising trend in housing prices has been observed across nearly all regions in the Netherlands, with the exception of Zeeland, where prices increased by less than 10% over the last quarter. Nevertheless, even in Zeeland, homebuyers still paid 6.9% more compared to the same period the previous year.

       

      The sharpest rise was seen in the province of Utrecht, where prices jumped by 14.4%. This significant increase is partly due to the housing market in the city of Utrecht, where prices surged by a staggering 18.4% over the last quarter compared to the same period last year. This makes Utrecht stand out significantly, surpassing other major cities like Amsterdam, where prices rose by 10.1%, and Rotterdam, which saw an 8.9% increase.

       

      More Homes Changing Hands Despite High Prices

       

      Despite the sharp rise in housing costs, more people have managed to buy homes. In every Dutch province, more homes were sold last quarter compared to a year earlier. In total, 54,147 homes were sold across the country, representing a 15.3% increase in the number of transactions compared to the same period in the previous year. Apartments, in particular, have been selling at a much higher rate.

       

      What’s Driving the Price Increases?

       

      The rapid increase in house prices can largely be attributed to the high demand for homes combined with a shortage of supply. With fewer homes available and a strong demand, competition among buyers has driven up prices. The lack of sufficient new housing projects also plays a key role, as construction has not been able to keep pace with the growing population and demand for homes, especially in urban areas.

       

      Outlook for the Dutch Housing Market

       

      Looking ahead, it’s unclear whether housing prices will continue their rapid ascent, but the current trend suggests that the market is still highly competitive. The affordability of homes, especially for first-time buyers, is becoming increasingly challenging, even as more transactions are taking place. As long as the imbalance between supply and demand remains, housing prices are likely to stay elevated, particularly in high-demand areas like Utrecht and Amsterdam.

      Request a free intake meeting

       

      If you would like to discuss the current housing market and mortgage landscape, you can always reach out to us or to Nick from Your Dutch Home for an online intake session. These sessions are always free of charge.







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        We can advise you in

        following financial products

        Mortages

        On a mission to buy a house in the Netherlands? Let us help you get
        the keys to your new home!

        Insurances

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        Taking low mortgage rates with you when moving

        House prices are on the rise again. So-called “second time buyers” who sell their old homes can often benefit from the increased value of their old property when purchasing a new house.  However, it’s important to consider what happens with the old mortgage, especially regarding the mortgage interest rate.  

        Homeowners who, for example, want to take an old mortgage with a relatively low interest rate to a new home need to pay extra attention. This is likely to become even more important in the coming years due to a shift in the interest rate market that occurred two years ago.

         

        Between 2016 and the end of 2021, mortgage rates were relatively low. At the lowest point, you could even lock in long-term mortgage rates at around 1.5%. Since 2022, however, mortgage rates have risen sharply, and they have now been hovering around levels of about 4.5% for some  time and in the last few weeks have dropped to below 4.0%.  

         

        1) Timing of Selling the Old and Buying the New Home  

         

        If you buy a new home before selling your old one, you need to check with the lender whether you can carry over the old mortgage rate. It is important to notify them in time. With some lenders, you may lose the option to transfer the old rate if you notify them too late.  

         

        On the other hand, you should also be cautious if you sell your old home first, pay off the associated mortgage, and then buy a new home. It’s also important to know whether the lender enforces a certain time period between paying off the old mortgage and finalizing the mortgage for the new home at the notary. 

         

        2) From an NHG Mortgage to a Non-NHG Mortgage 

         

        It’s possible that you initially took out a mortgage with NHG (National Mortgage Guarantee), which under certain conditions covers the repayment of any residual debt if homeowners face financial difficulties and can no longer afford the mortgage. NHG mortgages typically come with a slightly lower interest rate compared to mortgages without NHG insurance. 

         

        But what if you want to take out a mortgage for your new home without NHG coverage? In this case, there’s usually an interest rate surcharge compared to the NHG mortgage, and you’ll need to check the terms regarding carrying over the mortgage interest rate when moving.  

         

        3) What About the Affordability Test Interest Rate? 

         

        One factor that can affect old mortgages when moving is the remaining fixed-interest period. If this period is less than ten years, lenders use a relatively high “affordability test interest rate” of at least 5% for determining the maximum mortgage amount. This could reduce your total borrowing capacity. 

         

        In such cases, taking out a new mortgage with a longer fixed-interest period based on current rates may be more practical, especially considering the maximum mortgage amount.  

         

        4) Divorce: Splitting a Low Mortgage Interest Rate is Usually Not Possible  

         

        We also would like to point out that in the event of a divorce, it’s usually not possible to split the mortgage and allow both partners to keep the low mortgage interest rate. At many lenders, only one of the two partners is allowed to retain the low rate, and the other must give permission for  this.  

         

        5) Switching to Another Lender  

         

        Carrying over a low mortgage interest rate automatically means staying with the same lender when moving. However, if you have a relatively short remaining fixed-interest period and your current lender’s rates are less attractive than those of the competition, it might be worth considering switching to another lender. 

         

        Overall, if you have a low interest rate on your current home it is always worthwhile to discuss your situation and possibilities with one of our mortgage advisors. 

        Request a free intake meeting

         

        If you would like to discuss the current housing market and mortgage landscape, you can always reach out to us or to Nick from Your Dutch Home for an online intake session. These sessions are always free of charge.







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          Mortages

          On a mission to buy a house in the Netherlands? Let us help you get
          the keys to your new home!

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          Purchasing a house in The Netherlands: how we can help with placing a bid without a financial clause

          With the housing market in The Netherlands overheating again, many client are asking if they can place an offer without a financial clause for a pending mortgage approval. In this tight market this can make the difference whether or not you are successful with a bid. There is nothing more annoying then having the best offer but another competitor takes the price with a lower offer simply because they did not have any conditions on it. Well, we have some good news for you. With our special priority services clients can place an offer without financial conditions. Let us explain how it works.

          How does a financial clause work?

           

          When your bid on a property is accepted, the seller’s agent or the notary will draft a purchase agreement. Once you sign this, you legally always have three days in which you can still back out or change your mind without a penalty. After that the penalty could be 10% of the purchase amount.

           

          As the mortgage is normally not approved in three days, a mortgage advisor or agent will recommend you to put in a condition on your offer that you require three or four weeks to get your mortgage approved. During this period if you mortgage gets declined, you can back out without a penalty. So the financial clause is there to protect the buyer, but it leads to uncertainty for a longer period of time for the seller.

           

          If you’re not sure if you can get a mortgage approved for the purchase amount, bidding without a financing condition is quite risky. However, in this market, it is a popular option at the moment. It makes your bid much more attractive: the seller is almost certain that their house will be sold in just three days. It’s therefore common for sellers to prefer the offer without conditions, not necessarily even the highest bid!

           

          Why can you remove the financial clause if you work with Independent Expat Finance?

           

          Our company has access to almost all mortgage providers in The Netherlands. But with two of the biggest providers, ABN AMRO Bank and ING Bank, we have a priority service. This means that once we submit a complete mortgage application to either, we have an agreement with them that they will review the application on the next business day at latest. Good preparation is important but if we have all the documents necessary for the application ahead of signing the purchase agreement, we could get an approval a day later. Or at the worst, we have feedback of the mortgage provider if anything needs to be adjusted or extra documents are required. All of this within the three day cool off period. If it doesn’t work out, you can still withdraw from the purchase free of charge.

           

          How can you make use of our priority service?

           

          For starts, get in contact with via our website or phone number to schedule an intake session. During our intake session, it is one of the subjects we will discuss as there are some conditions for making use of this service.

           

          For the priority service the secret lies in a good preparation on both the client side as well as on our end. Having all your income documents (also possible for entrepreneurs or self employed) ready and checked by us ahead of signing the purchase agreement is first of all necessary. Secondly, having a valuation report ready and or demonstrating you have sufficient savings to pay for any difference in the valuation vs purchase price is important. Then once we submit the application, it is our job to make sure the mortgage providers starts reviewing your application within the service level agreement.

          Request a free intake meeting

           

          If you would like to discuss the current housing market and mortgage landscape, you can always reach out to us or to Nick from Your Dutch Home for an online intake session. These sessions are always free of charge.







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            Mortages

            On a mission to buy a house in the Netherlands? Let us help you get
            the keys to your new home!

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            Mortgage product explained: ABN AMRO’s Interest Reflection Period

            In the realm of mortgage financing in the Netherlands, ABN AMRO stands as one of the most prominent players in the market, offering a diverse range of mortgage products tailored to meet the needs of homebuyers. One notable feature that sets ABN AMRO apart is its inclusion of an interest reflection period on certain interest fixed terms in their offering. In this article we want to explain why it can be useful and how to take full advantage of it.

            When you are applying for a mortgage you will need to choose a fixed-rate mortgage and or a variable-rate mortgage. Over the last two years we have seen something interesting happen to mortgage interest rates. A 10 year interest fixed term rate on a regular mortgage went up rapidly from 1.5% to almost 5%. At the same time the shorter fixed terms like 1, 3 or 5 years as well as the variable-rate went up even further in some cases. That having been said, what should you do if you expect that within the coming years the rates will go down again? If you lock your rate for long you will either be stuck with it or have to likely pay a penalty to switch. If you go for a variable-rate or 1 year interest fixed term you will pay a high price at the moment and possibly only later will you benefit in case the rates go down but who knows when that will be.

             

            This is where the interest reflection period mortgage product can come into play. The interest reflection period is a distinctive feature embedded in certain ABN AMRO mortgage interest fixed terms, such as the 2, 3, 7 or 12 interest fixed term. It allows borrowers to periodically reassess and adjust their mortgage interest rates in the final 12 or 24 months of the interest fixed term. Unlike traditional interest fixed terms that lock in a specific interest rate for the entire term (which is also the case with ABN AMRO’s 5 or 10 year interest fixed term), the interest reflection period offers borrowers the opportunity to adapt to future changes in the financial landscape.

             

            Whilst writing this article ABN AMRO has a variable-rate of 5,40%. Their 1 year rate is 4,44% and 5 year rate is 3,47% (short term rates higher then longer terms we called inverted rates because normally it should be the other way around). Now ABN AMRO also has a 3 year rate of 3,79%, which is only slightly higher then the 5 year rate but significant better than the variable-rate or 1 year rate. And this 3 year rate also has a reflection period of 24 months. This means that in the final 24 months you can switch it to a different interest fixed term or variable-rate without a penalty. In that regard for us it does not make sense to consider their variable-rate or 1 year rate at the moment but rather their 3 year rate with the interest reflection period. On top of that we can also split the whole loan into different loan parts with a 3 year rate with the interest reflection period (giving you multiple options later) or after the first year is completed to switch it once more to a 3 year rate with an interest reflection period.

             

            So if market rates have decreased, borrowers may benefit from lower interest rates, potentially reducing their overall mortgage costs earlier. If the rates stay the same or go up, a borrower will likely wait till later in the interest fixed term or the final moment at the end to switch.

             

            ABN AMRO’s mortgage products with an interest reflection period provides a flexible and adaptive solutions to its customers. This unique feature empowers borrowers to navigate changing market conditions, ensuring that their mortgage remains aligned with their financial goals. As with any financial decision, prospective borrowers are encouraged to engage with our advisors to fully understand the implications of the interest reflection period and make informed choices that best suit their individual needs.

            Request a free mortgage intake meeting

             

            Give us a call or fill in our contact form below if you are interested to discuss further with one of our mortgage advisors







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              We can advise you in

              following financial products

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              On a mission to buy a house in the Netherlands? Let us help you get
              the keys to your new home!

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              Renting your home on Airbnb: understanding the rules in the Netherlands

              Renting out your own home on Airbnb sounds like an interesting opportunity to earn extra income right? But is it allowed without breaking any rules? In this guide, we’ll walk you through the regulations that apply.

               

              At present, the Netherlands boasts over 75,000 available Airbnb accommodations. While this benefits tourists, it can pose challenges for municipalities and residents, occasionally leading to disturbances from an influx of tourists in residential areas. For a long time, there was no clear legislation regarding renting out your property on Airbnb. However, since 2021, a significant change took place with an amendment to the Housing Act, specifically the Tourist Rental of Residential Space Act. This amendment empowers municipalities to intervene if necessary, considering the liveability of the residential environment.

              What actions can municipalities take to regulate Airbnb rentals?

               

              • Registration Requirement: Offering residential space without a registration number is strictly prohibited, aiding efficient enforcement.
              • Nightly Limits: Some municipalities, such as Amsterdam, have imposed a maximum of 30 nights per year for rentals.
              • Notification Obligation: Landlords may need to notify the municipality in advance, facilitating compliance checks.
              • Licensing Requirement: In addition to registration, landlords may need a permit for tourist rentals. This measure is applied when registration or notification obligations prove ineffective.

               

              The extent to which municipalities apply these measures varies, and those considering Airbnb rentals should check with their local municipality for specific guidelines.

              Other Considerations for Airbnb Rentals

               

              In addition to the municipal regulations, there are other factors to consider. You must be the owner of the property you intend to rent out. Renting out a property you’re leasing is generally not allowed unless you have permission from the owner and Owner’s Association.

               

              If you have a mortgage, you need to seek approval from your mortgage lender before renting out your property. The permissibility of renting out your purchased home on Airbnb depends on your mortgage terms and involvement with a Homeowners’ Association. Check your mortgage terms for any restrictions on renting out your property. Some banks, like ABN Amro, may prohibit long-term rentals, and interpretations regarding short-term rentals like Airbnb can vary.. It’s crucial to review the specific conditions of your mortgage provider.

               

              Homeowners’ Association: If you are part of a Homeowners’ Association, approval is typically required for commercial use of your property. Non-compliance may result in fines or legal consequences, as outlined in the association’s rules.

               

              For those without a mortgage or Homeowners’ Association affiliation, renting out your home on Airbnb is generally permissible, although regulations in Amsterdam may necessitate mandatory registration with the municipality.

              Do I Need to Pay Taxes When Renting Out My Home on Airbnb?

               

              When temporarily renting out your purchased home, the tax authorities consider this as income from your property. Such income falls under Box 1 (taxable income from work and home). You are required to add 70% of the rental income to your total income. However, you can deduct related expenses, such as cleaning costs and utilities.

              Example:

               

              You earn € 2.000,- by renting your home for two weeks. After deducting cleaning costs (€ 50,- each for pre and post-guest cleaning) and € 50,- for utilities, you have incurred total costs of € 150,-.

               

              Calculation: € 2.000,- € 150,- = € 1.850,-

               

              You are then required to declare 70% of this amount to the tax authorities.

               

              Final Calculation: € 1.850,- * 0.70 = € 1.295,-

               

              Ultimately, you need to add € 1.295,- to your taxable income derived from your property.

               

              In conclusion, while Airbnb can be a lucrative option, it is crucial to be aware of and adhere to the rules and regulations governing short-term rentals in your area, ensuring a smooth and lawful experience for both hosts and guests.

              Request a free mortgage intake meeting

               

              Give us a call or fill in our contact form below if you are interested to discuss further with one of our mortgage advisors







                Call me backSend me an e-mail

                We can advise you in

                following financial products

                Mortages

                On a mission to buy a house in the Netherlands? Let us help you get
                the keys to your new home!

                Insurances

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                Higher maximum mortgage with a better energy label

                In 2024, the maximum mortgage will increase if you purchase a home with a better energy label. On the other hand If you buy a home with a poor energy label, you can borrow less than is currently the case. For a highly energy-efficient home, the difference can be up to € 50.000,-. Additionally, the loan options for energy-saving measures will also change.

                Every euro you spend on your energy bill is one euro less you can spend on your mortgage. For this reason, from 2024, your maximum borrowing capacity will be linked not only to your income, home value, and mortgage interest rate but also to the energy label. This ensures that the maximum mortgage aligns better with the actual financial capacity households have. Likely this will also give another reason for home owners to install energy saving measures and obtain a better energy label.

                 

                Those with a more energy-efficient home can spend more on a mortgage, allowing for a higher loan amount. For homes with labels C and D, this is € 5.000,-. It can go up to € 50.000,- if you have a home with an A++++ rating and an energy performance guarantee for at least ten years. The table below shows the effect for other energy labels.

                Energy label of the home Extra amount that can be borrowed
                E, F, G € 0,-
                C, D  € 5.000,-
                A, B € 10.000,-
                A+, A++ € 20.000,-
                A+++ € 30.000,-
                A++++ without energy performance guarantee € 40.000,-
                A++++ with a 10-year energy performance guarantee € 50.000,-

                Suppose you have your eye on a home that is priced at € 390.000,-. The property is appraised at € 400.000,-. Based on your income, you can only borrow a maximum of € 375.000,-. Because the home you’re interested in has a label B, you can borrow an extra € 10.000,-. Now you only need to pay € 5.000,- from your own pocket instead of € 15.000,-. However, if the appraised value of the home is € 375.000,- then that remains the maximum loan amount. You cannot borrow more than the property value.

                 

                If you want to make your home more energy-efficient, this year you can, under certain conditions, borrow an additional € 9.000,- for that purpose. In 2024, the extra loan amount will depend on the energy label. For homes with a lower energy label, you can borrow more (maximum € 20.000,- with E, F or G label) compared to homes with a better energy label (minimum € 0,- with A++++ label). What remains the same is that the additional amount to be borrowed is deposited in an energy saving measures fund account with the mortgage provider. This ensures that the extra loan amount is actually used for the sustainability of the home.

                 

                If we go back to the previous example, in 2024, you can borrow a maximum of € 385.000,-. When you want to make the home more sustainable after the purchase and meet the conditions, you can borrow an additional € 10.000,-. However, this € 10.000,- is placed in an energy saving measures fund. So, you still need your own money to cover the remaining € 5.000,- for the purchase. Also don’t forget the buyer’s costs either.

                 

                Considering buying a home? A logical first step in the buying process is knowing how much you can borrow. This allows you to search for a home more effectively. Curious about how much you can borrow in 2023 and how the situation will change in 2024? We’d be happy to map it out for you. Feel free to contact us via the form below.

                Book a free mortgage intake meeting

                 

                Our team of mortgage advisors is ready to assist you in finding the right mortgage. Contact us today for a no-obligation consult and discover the many options available to you.







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                  We can advise you in

                  following financial products

                  Mortages

                  On a mission to buy a house in the Netherlands? Let us help you get
                  the keys to your new home!

                  Insurances

                  Reduce financial risks and get the support that you need. Getting the right insurance now may save you a lot of money in the future.

                  The Impact of Mortgage Interest Rates on Dutch Housing Prices

                  Mortgage interest rates have a significant influence over housing prices in the Netherlands, a country celebrated for its picturesque landscapes and vibrant cities. In this article, we’ll examine how changes in mortgage interest rates reverberate through the Dutch housing market, shaping the decisions of both buyers and sellers.

                   

                  The Dutch housing market is characterized by competitiveness and dynamism, especially in cities like Amsterdam, Rotterdam, and Utrecht. This results from soaring demand, urbanization and a limited housing supply, creating an environment prone to price fluctuations.

                  Affordability

                   

                  One of the immediate consequences of fluctuating mortgage interest rates in the Netherlands is their impact on housing affordability. Lower interest rates translate into more affordable homeownership, as reduced monthly mortgage payments beckon buyers. Conversely, rising interest rates squeeze affordability. Increased monthly mortgage costs can deter potential buyers, potentially leading sellers to lower their asking prices, thus exerting downward pressure on housing prices.

                  Demand and Supply

                   

                  Mortgage interest rates wield a pivotal influence on the equilibrium between housing demand and supply in the Netherlands. Low rates stimulate demand, often triggering bidding wars and price surges. Between 2020 and 2022 this was happening and it was not uncommon bid were up to 100.000,- euro over the asking price. Conversely, rising rates can depress demand, slowing down price growth and compelling sellers to reassess their pricing strategies. Last year interest rates shot up from 1.5% to 4.5% and this had a big effect on the prices. 

                  Investment and Speculation

                   

                  Interest rate fluctuations significantly impact real estate investment and speculation in the Dutch housing market. Low interest rates lure investors seeking higher returns, ultimately driving housing prices upward. Between 2017 and 2022 we had many clients interested in buy to let properties. Conversely, rising rates may discourage investors, potentially cooling the market and moderating price escalations.

                  Government Policies

                   

                  To manage potential market instability, the Dutch government has implemented various policies. Measures like loan-to-value (LTV) and loan-to-income (LTI) limits are in place for a few years to restrain excessive borrowing and ensure financial stability. More recently many municipalities require you to live in a property for at least 4 years before you may rent it out. This year some additional measures are being taken, increasing the transfer tax to 10.4% for purchasing second homes or investment properties and higher taxes on property assets.

                  Conclusion

                   

                  In summary, changes in mortgage interest rates have a significant influence over Dutch housing prices. These fluctuations impact affordability, demand and supply dynamics, investment and speculation, and government policies. For all stakeholders in the Dutch real estate sector—buyers, sellers, and investors—it is important to monitor interest rate changes closely as they signify the intricate interplay between financial and housing markets in the Netherlands. With current mortgage rates three times what they were last year some home buyers are hesitant to buy.

                   

                  That being said the market is slightly less competitive so easier to close a deal without substantial overbidding. If it aligns with a home buyers risk profile, we are often advising to lock interest rates for periods of 3, 5 or 7 years instead of 10 or 20 years. If interest rates would drop in the coming years these clients will benefit from a possible increase in housing prices as well as being able to get a better interest rate without or with less of a penalty.

                   

                  During an intake meeting our advisors address these topics, so send us a message to schedule an appointment.







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                    We can advise you in

                    following financial products

                    Mortages

                    On a mission to buy a house in the Netherlands? Let us help you get
                    the keys to your new home!

                    Insurances

                    Reduce financial risks and get the support that you need. Getting the right insurance now may save you a lot of money in the future.

                    How do variable mortgage interest rates work?

                    For many people, purchasing a home is one of the most significant financial investments they will make in their lifetime. In the Netherlands, like many other countries, one of the primary methods of financing a home purchase is through a mortgage. A mortgage is a loan obtained from a financial institution to buy a property and there are different types of mortgage interest rates available. Among them, variable mortgage interest rates are an option that appeals to certain borrowers due to their unique features and potential advantages.

                     

                    In this blog, we will explore how variable mortgage interest rates work in the Netherlands, along with their pros and cons.

                    How Variable Mortgage Interest Rates Work:

                     

                    A variable mortgage interest rate, also known as a floating rate or adjustable rate, is a type of interest rate that fluctuates over time in response to changes in the market interest rates set by the European Central Bank (ECB) or other benchmark rates. The rate can vary at specific intervals, which are usually determined by the mortgage provider, and can be influenced by economic conditions, inflation rates, and other factors affecting the financial markets.

                    Pros of Variable Mortgage Interest Rates:

                     

                    • Lower Initial Rates: One of the primary advantages of a variable interest rate is that it often starts lower than fixed-rate mortgages. This can be attractive to homebuyers, especially when market interest rates are relatively low. Lower initial rates mean lower initial monthly payments, making it easier for borrowers to manage their finances at the beginning of the mortgage term. Currently in the Netherlands we see that with most mortgage providers the variables rates are higher than fixed term rates, so called inverted rates.

                     

                    • Potential Savings: If market interest rates decrease over time, borrowers with variable mortgages can benefit from lower monthly payments without having to refinance their loans. This potential for savings can be advantageous, particularly for those who plan to stay in their homes for a shorter period.

                     

                    • Flexibility: Variable mortgage interest rates offer borrowers more flexibility than fixed-rate mortgages. If a homeowner expects interest rates to decrease in the near future, a variable rate can be a suitable option.

                     

                    • Early Repayment: Variable mortgage loans often allow borrowers to make early repayments without incurring significant penalties. This feature provides more freedom for borrowers who may wish to pay off their mortgages sooner, reducing the overall interest paid.

                    Cons of Variable Mortgage Interest Rates:

                     

                    • Uncertain Payments: The most significant drawback of a variable interest rate is its uncertainty. Monthly payments can fluctuate, making budgeting and financial planning more challenging for borrowers, particularly those on fixed incomes or tight budgets. A sudden increase in interest rates could lead to substantially higher monthly payments.

                     

                    • Less borrowing capacity: due to the extra risk element a variable interest rate allows you to borrow less on your income than with a interest fixed term of 10 years or more. If you are buying well within your budget this does not matter much, but for clients looking to borrow on their limit it does.

                     

                    • Potential Higher Rates: While a variable interest rate can start lower than fixed rates, there is also the risk that it could rise significantly over time. This could lead to higher long-term costs for the borrower compared to a fixed-rate mortgage.

                     

                    • Market Volatility: Variable mortgage interest rates are directly linked to market conditions and are influenced by external factors that borrowers cannot control. Economic changes, inflation, or global events can lead to unpredictable fluctuations in interest rates.

                     

                    • Psychological Stress: The uncertainty surrounding variable rates can cause stress and anxiety for some borrowers, especially those who prefer stable and predictable financial arrangements.

                     

                    • Limited Options: In the Netherlands, variable mortgage interest rates are less common compared to fixed-rate mortgages. As a result, borrowers may have fewer mortgage providers and products to choose from when opting for a variable rate.

                    Conclusion:

                     

                    Variable mortgage interest rates in the Netherlands can be an appealing option for certain borrowers due to their potential for the opportunity for savings if interest rates decrease. However, these advantages come with the trade-off of uncertain payments and the possibility of higher rates in the future. Before choosing a mortgage type, prospective homebuyers should carefully assess their financial situation, risk tolerance and future plans to determine whether a variable interest rate aligns with their needs and preferences.

                     

                    Seeking advice from our mortgage advisors can be beneficial in making an informed decision. Remember, regardless of the chosen mortgage type, responsible financial planning is key to successful homeownership.







                      Call me backSend me an e-mail

                      We can advise you in

                      following financial products

                      Mortages

                      On a mission to buy a house in the Netherlands? Let us help you get
                      the keys to your new home!

                      Insurances

                      Reduce financial risks and get the support that you need. Getting the right insurance now may save you a lot of money in the future.