Dutch housing market update April 2024 – “overbidding becoming more common again”

Over the last few months we are hearing from more and more home-buyers that it is becoming more difficult to close a deal with a seller. A lot of competition from other potential buyers is resulting in heavy overbidding.  To give you some latest insights we discussed the market situation with real-estate agent Nick Wagelaar from Your Dutch Home. Like us he specializes in expat clients and he is mainly active in the region Almere, Amsterdam, Utrecht and Haarlem.

“Whether and how much overbidding occurs depends on the location, the condition of a house, and the pricing. A property must be completely finished and have a good energy label,” says Nick. “Then, easily 40.000,- or 50.000,- euro is overbid. It’s especially an urban trend at the moment. In smaller towns or further away, we see it happening much less. In the price segment for starters, up to around 435.000,- euro, you regularly see overbidding up to about 20 percent. As a buyer’s agent, I advise clients on what a house is worth. But when they hear that there are over 25 viewings, they know: they won’t make it with that amount. Then it’s up to them, do they participate in a bidding war and pay much more? People who currently pay a lot of rent and or have a good income are very eager to buy at the moment.”

 

There is also overbidding in around these big cities, but certainly not always. Nick mentions that in town like Hoorn or Purmerend home-buyers are clearly look at energy labels. “Older homes have a harder time on the market”. He sees a lot of interest, especially up to a price range of about 400.000,- euro. “And then there’s overbidding between 2 and 8 percent.”

 

Analysts from various banks in the Netherlands expect house prices to rise this year, between 5% and 8%. With significantly higher wages and slightly lower mortgage rates, people can afford a higher mortgage again. Over the past few months, the average interest rate for a 10-year fixed-rate mortgage with National Mortgage Guarantee has dropped from around 4.5% to about 3.9%. Properties that require renovations are less popular at the moment. “If it’s a house that needs another 75.000,- euro or more to be renovated, you usually don’t see overbidding issues.”

 

Last year, the percentage of houses sold above the asking price increased. At the end of 2023, this applied to just over half of the houses, according to the real estate agents’ association NVM. During the Covid property boom, when mortgage rates were extremely low, this was even higher: over 80%. Nick expects that in 2024 you will continue to see more frequent and higher overbidding. “The market here is extremely overheated now,” says Nick. Last week, there was a house with an asking price of 650.000,- that sold for 775.000,- euro.” According to Nick, it also depends on how competitively you market your house. “With a good price, you have more viewers and more overbidding. If you ask too much, you’ll have few viewers.”

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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    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.

    Employer statement template updated for 2024

    Securing a mortgage is a significant milestone in the journey to homeownership. As a mortgage advisor we want the process to run as smooth as possible for our clients. For mortgage applications in the Netherlands one of the documents that is often required is the employer statement. This document provides essential information about an applicant’s employment status and income. Mortgage providers in the Netherlands now require the use of a new employer statement template, replacing the previous version.

    The new employer statement template introduces several modifications aimed at enhancing transparency and accuracy in assessing an applicant’s financial stability. One notable change is the inclusion of additional details regarding employment terms and conditions. Employers, or their HR staff, will now need to fill in for mortgage applicants a comprehensive breakdown of their income components, including base salary, bonuses, allowances and commission. This level of detail aims to offer a more holistic view of an individual’s financial situation.

     

    Mortgage applicants in the Netherlands must adapt to these changes promptly to avoid delays in the application process. In case an old template is used there is a high chance the mortgage provider will reject the document and ask to fill it in once more on the new template. To navigate these changes successfully, applicants are encouraged to collaborate closely with their employers. 

     

    You can find the latest version of the employer statement here. There is an English and Dutch version available. You can recognize the latest template as it mentions version 2024-1 2.0 on the bottom right in the footer.

     

     

    In some cases we can advice an alternative method to determine an applicants income. Rather than the employer statement we will request a document you can download from the UWV (social security organization in the Netherlands). This document list your monthly income and based on your employment history and type of contract  another tool we have access to will determine the income we can use for an application. This alternative is for example often used when an applicant does not have an intention for an indefinite contract or has a mobility or housing allowance they want included in the calculation.

    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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      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.

      Mortgage Application Updates in the Netherlands for 2024

      Every year in January new rules come into effect that can impact prospective homebuyers in the coming year. In 2024, we are expecting several key updates and changes such as adjustments in the National Mortgage Guarantee (NHG) limit and changes in the starter transfer tax exemptions. Here’s a comprehensive look at the notable updates shaping the mortgage application process in the Netherlands this year.

      1. How much can you afford to pay in monthly mortgage expenses?

       

      Your maximum mortgage depends on your income and value of the property you are buying. How much exactly you can borrow on your income will be slightly amended next year. This has to do with the fact that other expenses such as heating or electricity have become more expensive, leaving less to pay for your mortgage. Depending on your income, for most potential home buyers this measure will decrease your borrowing capacity with 1% to 5%. If in the past year you received a salary increase of a few percent or more, then this positive change should offset the effect of this new measure.

       

      2. NHG Limit Increase to 435.000,- euro

       

      The National Mortgage Guarantee (NHG) is a government-backed scheme designed to protect both lenders and borrowers in the event of financial difficulties. In 2024, the NHG limit will be increased to 435.000,- euro. As of December 2023 homebuyers opting for an NHG-backed mortgage can secure this guarantee for loans up to the new limit, providing an added layer of security and lower interest rates compared to a regular mortgage. Note that the new limit does not only apply to new purchases. Current home owners with properties worth less than the new limit can also benefit from this by refinancing their regular mortgage for an NHG mortgage (only possibly in combination with a mortgage increase for renovations).

       

      3. Transfer Tax Starter Exemption for Buyers Under 35

       

      One of the significant updates is the extension of the transfer tax starter exemption for homebuyers under the age of 35. Previously, this exemption applied to properties up to 440.000,- euro, but in 2024, it will be raised to 510.000,- euro. This adjustment aims to ease the financial burden on young buyers, making homeownership more accessible for this demographic. We already have clients that have been buying homes up to the new limit over the past few months with delayed transaction dates for January 2024 in order to benefit from the exemption.

       

      4. Additional Borrowing Capacity for Single Persons

       

      Single individuals entering the housing market will benefit from a rule update allowing them an extra borrowing capacity of as much as 16.000,- euro. This adjustment acknowledges the unique and difficult financial circumstances of single applicants in the Netherlands and aims to provide them with increased flexibility in securing mortgage financing. The additional borrowing capacity can contribute to making homeownership a more viable option for those navigating the real estate market on their own. Nevertheless, for a single person with a mean income of 40.000,- euro the maximum mortgage will be 185.000,- euro next year, which in most Dutch cities will not get you very far.

       

      5. Energy label will impact your borrowing capacity 

       

      As of 2024 the energy label of a property you are interested to buy will also impact your borrowing capacity. A property with an A or B label will for example increase your borrowing capacity with 10.000,- euro while a property with a A+++ label will for example increase your borrowing capacity with 30.000,- euro. This measure will push demand for energy efficient homes up and will also have an effect on affordability of new build properties. Read our previous article on this subject for more detailed information.

       

      6. Student Loan Impact on Mortgage Applications will Change

       

      A change with mentioning for applicants with outstanding student loans in the Netherlands, is that as of next year, mortgage providers will be looking at the monthly loan repayment amount rather than the initial loan amount. This will benefit those who have made extra payments to pay of their student debt with an increase in their mortgage eligibility amount.

       

      7. 30% Ruling Update for 2024

       

      Many of our clients have a 30% ruling. This is a tax advantage that allows skilled migrants to receive 30% of their salary tax-free for a period of 5 years. In 2024, there will be updates to the 30% ruling as put forward by the Dutch government in the tax amendments for 2024. The key change will be that for new 30% ruling applicants, the first 20 months 30% of the salary will be tax free, followed by another 20 months where 20% will be tax free and a final 20 months where only 10% will be tax free.

       

      For expats that already have a 30% ruling there is a transition period so they will not necessarily be impacted. However, in a situation for example where an expat with an old 30% ruling switches employment after 24 months and applies for a new 30% ruling this will have an effect for the remaining 36 months (an additional 16 months at 20% tax free and 20 months at 10% be will granted instead of 36 months 30% tax free).

       

      All though in the past the 30% ruling only had a minimal effect upon the maximum mortgage capacity of expats, the update will likely also mean it can no longer be considered in a mortgage application at all. Small side note: the Dutch senate is voting on this measure in the coming week and there are talks about that maybe the decision should be reversed again in 2025.

       

      Conclusion 

       

      In conclusion, the mortgage application process in the Netherlands in 2024 reflects a series of updates aimed at enhancing accessibility and flexibility for a diverse range of homebuyers. From increased NHG limits to adjustments in transfer tax exemptions and special considerations for single applicants, these changes are designed to adapt to the evolving needs of the housing market. As always, prospective homebuyers are encouraged to stay informed and you can always seek our professional advice to navigate these updates successfully.

      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.







        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.

        Dutch Mortgage Interest Rates Decline in November

        In a noteworthy development for homeowners and prospective buyers in the Netherlands, the month of November has witnessed a welcome drop in Dutch mortgage interest rates. This encouraging trend can be attributed to the concurrent decrease in capital market rates coupled with an ebbing inflation. The interplay of these economic factors has created a slightly more favourable environment for borrowers, leading to lower monthly mortgage expenses and higher maximum borrowing capacity. 

        One of the primary drivers behind the recent decline in Dutch mortgage interest rates is the fall in capital market rates in the US and EU. Mortgage rates are intricately linked to the broader economic landscape and changes in capital market rates often have a cascading effect on borrowing costs. In recent weeks, a noticeable decrease in these rates has provided the impulse for Dutch mortgage providers such as ABN AMRO Bank and ING Bank to adjust their mortgage interest rates, offering Dutch homeowners a reprieve in the form of lower interest rates. At the moment we are able to secure NHG mortgages with an interest fixed term of 5 years around 4% again.

         

        Another factor contributing to the reduction in mortgage interest rates is the easing of inflationary pressure. As inflation recedes, central banks may adopt accommodative monetary policies, including lowering interest rates. The diminishing inflationary concerns in the Netherlands have created an environment conducive to reduced borrowing costs for mortgages.

         

        The decline in Dutch mortgage interest rates is welcome news for existing homeowners near the end of their interest fixed terms and for prospective buyers aiming to enter the housing market. Lower interest rates can translate into more affordable monthly mortgage payments. A higher borrowing capacity together with more affordable mortgage expenses will possibly also have a positive effect on housing prices in the coming months.

         

        While the current drop in mortgage interest rates presents favourable conditions for borrowers, it’s essential to remain mindful of the dynamic nature of financial markets. Economic factors, including inflation rates and capital market trends, can evolve over time. Prospective homebuyers and existing homeowners should stay informed about market dynamics and work closely with our mortgage advisors to make informed decisions that align with their long-term goals and reduce risk.

        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.







          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.

          NHG limit to increase to € 435.000,- euro in 2024

          The limit for a mortgage with National Mortgage Guarantee (NHG) will increase as of January 1st 2024. This means that people will soon be able to obtain financial protection when buying a house up to a value of €435,000,-.

          NHG is designed to mitigate the risks associated with buying a home. In cases of unexpected events such as financial difficulties, forced sales, or residual debts that prevent homeowners from meeting their mortgage obligations, the Stichting Waarborgfonds Eigen Woningen (WEW), the organization behind NHG, steps in to provide assistance.

           

          Because of this extra security, buyers with a NHG mortgage benefit from a lower interest rate compared to regular mortgages in The Netherlands. In 2023, the NHG limit was set at €405,000. For the coming year, this threshold will increase by €30,000, making it €435,000. The average price of a home in September of this year was €422,000. Those looking to invest in making their home more energy efficient can even secure a loan of up to €461,100 using NHG.

           

          NHG is particularly popular among first-time homebuyers. More than 40% of all homes purchased in the Netherlands have a mortgage with NHG, according to data from the organization.

           

          Under specific conditions, the Stichting WEW can facilitate the repayment of a borrower’s mortgage to the mortgage provider. However, this assistance is not available in cases where someone is terminated from their job with cause or wishes to move due to new housing preferences. Additionally, the foundation can provide support through a budget coach, payment arrangements, bridge loans, or provisional interest refunds via the tax authority Belastingdienst.

           

          Like in 2023, home buyers applying for a NHG mortgage will pay 0.6% of the mortgage amount next year to take advantage of this program. “It is important that NHG remains accessible to its target audience, allowing people to finance a home with the protection of NHG,” says Carla Muters of NHG. “That is why we are pleased that the NHG limit is increasing in 2024.”

           

          Not only home buyers can benefit from the NHG limit increase. In some cases also home owners that recently bought a property and now have a regular mortgage can refinance to an NHG mortgage if they also do some renovations. This could for example be interesting for clients that bought a property that was at the time valued slightly above the previous limit but under the new limit. With interest rates flat over the last few months they could benefit from lower NHG rates with also extra protection against risks as well as financing renovations.

          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.







            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.

            Transfer tax starter exemption in 2024

            In the Netherlands you can benefit from a transfer tax starter exemption if you are buying a property to live in yourself, are under 35 and have not used the exemption in a previous purchase. As of 2024, you won’t have to pay any transfer tax on a purchase price of up to € 510.000,- whereas in 2023 this threshold was € 440.000,-. It can save you the 2% transfer tax that would otherwise apply, your advantage could be up to € 10.200,- which is serious money.

            Buying in 2023 and receiving the keys in 2024

             

            It is crucial to pay close attention to the transfer date of your new home in 2024. Negotiations with the sellers will likely be necessary to ensure this. For a home with a purchase price of € 500.000,- this means you will need to put down € 10.000,- less which can make a significant difference. You can consult with the mortgage advisors of Independent Expat Finance before making an offer. We can assist you in timing the delivery correctly and making the most of the exemption.

            Do you qualify for the starter’s exemption?

             

            This tax benefit comes with conditions. Are you younger than 35 years old on the delivery date of the property in 2024? Is the purchase price lower than € 510.000,- ? Is this the first time you are using the exemption? In that case you qualify for the exemption! If you are still turning 35 in 2023 it is important to ensure the delivery occurs before your birthday. The exemption will then only apply for a purchase price up to € 440.000,-. If you are buying a property together and one of you is younger than 35 and meets the other requirements, then in this case, one person pays 2% tax over 50% of the purchase amount and the other 0% tax over the other half.

             

            Also note the purchase price is what determines if you qualify for the exemption, if you are buying a property for over € 510.000,- but plan on bringing in some capital, this means you do not qualify for the exemption. The exemption also does not apply for properties you are buying as an buy-to-let, in those cases the transfer tax is 10,4% in the Netherlands.

            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.







              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.

              The BEST way for expats to buy a house in the Netherlands

              Are you thinking about buying a house in the Netherlands? Lots of expats do at some point during their stay. With the sky-high rental prices in most of the bigger Dutch cities, who can blame them? Especially due to the incredibly low interest rates on mortgages, the tax rebate on your interest payments and that you can sell your house again at any time and don’t need to pay a penalty for cancelling the mortgage. Or some expats even switch their residential mortgage to a buy-to-let mortgage as an investment when they move abroad again.

               

              The process to buy a house in the Netherlands can be confusing though. Trust us, it’s confusing for everyone, not just for expats. It’s not like this is something you will often do. How many houses have you bought in your life?

               

              Hiring an independent mortgage consultant is the easiest way to buy a house. And if you hire us, don’t worry about the fees. We’re licensed in the Netherlands to set up your mortgage and offer complete packages and transparent fees. And our fee is even tax deductible. It’s a win-win situation.

               

              We know that you’re probably thinking: what’s the catch? But seriously, you can’t lose here. You get all the advice and help you need through one of our mortgage consultants that are specialized in working with expats and will guide you through the process till you get the keys to your new home.

               

              Here’s how the process of buying a house works in the Netherlands – that is if you let us help you.

              Step 1: Find out how much money you can borrow

               

              Most people will need a mortgage to finance a home. So before placing a bid, it is smart to check how much you can spend. An online quick scan on your maximum mortgage capacity can give you an indication but not nearly as accurate as checking with our mortgage advisors. Some common misconceptions are that buyers think allowances such as a mobility allowance can be included or that a 30% ruling makes a big impact on how much you can borrow. Also, quick scans are mostly based on a standard mortgage set up with the interest fixed for 10 years whilst in fact your advisor will know some alternative set ups on which you can borrow more. You can book an intake with us to hear more about your possibilities.

              Step 2: House hunting

               

              Once your mortgage is calculated, you can start house hunting within your price range. Since 2018, you can only finance up to 100% of the property value. You can’t use your mortgage to buy furniture or pay for advisory, notary, or valuation costs. However, these costs are tax deductible if they are directly related to the mortgage application.

               

              More important than ever, get yourself an agent. In the current market, sellers will always prefer an offer coming through an agent rather than yourself. They have a good network and it also shows you are taking it serious and willing to pay for it. We think this is even more a necessity for expats that are more inexperienced to the customs of the Dutch housing market. We can refer you to our network of agents that work in big cities like Amsterdam, Eindhoven, Rotterdam, Utrecht and Den Haag.

               

              If you do decide to search for a house on your own that is possible as well. The website with the best selection in the Netherlands is Funda (www.funda.nl). Through that website, you can call the selling realtor and make an appointment to see the house. We also offer purchase guidance services for clients who are buying without an agent but do need some guidance in the process (such as going through the purchase agreement with you).

              Step 3: Sign a provisional purchase agreement

               

              Once you found a house and agreed on a price and conditions with the current homeowners, you can sign a provisional purchase agreement. Don’t let the word provisional confuse you, this is actually a binding contract. After signing the agreement, you have 3 days to change your mind. If you change your mind after those 3 days, you’ll have to pay a fine up to 10% of the agreed purchase price.

               

              You can, however, put limiting conditions in the purchase agreement. Those conditions help dissolve the contract without having to pay the fine. One of the conditions often included is the financial clauses for your mortgage to be approved. It is also a good idea to include a condition for a technical inspection so you can make sure that the house doesn’t have any defects that can cost you a lot of money. If a major defect is found, the condition in your contract allows you to renegotiate the price or cancel the deal.

               

              Next stop: back to your financial advisor to complete your mortgage application.

              Step 4: Obtaining a mortgage for your new home

               

              We collect and check all the documents required for your mortgage application. Throughout this entire process, you won’t ever be directly in touch with the mortgage provider. We do that for you. Once your mortgage has been is approved we will go through the mortgage offer with you so you understand exactly what you will be signing. When the mortgage provider finished processing your application, they send the file and instructions to pay out the money to the notary that you selected.

              Step 5: Get the keys to your new home

               

              The last step in the process is to go to the notary to sign a transfer deed (between your and the sellers) and mortgage deed (between you and the mortgage provider). At this appointment you meet the current homeowners and the notary will go through the deeds with you. The notary has also collected all the invoices and is in charge of collecting money or paying out to the involved parties. You will then receive the keys and the notary will register the deeds with the Dutch registrar Kadaster.

              We couldn’t make this any easier

               

              See how easy that was? You can expect us to guide you through every step of buying your new home. We’re all about making your life in the Netherlands as easy and comfortable as possible. That is why we don’t stop at helping you finance your new home. We also can set up your insurances or utilities such as water, electricity, gas, and internet. Or we can refer you to a tax advisor to help you set up the tax rebate. Just like with every other advice we give, we’re unbiased and give you options to choose from.

              Imagine yourself sitting in your new living room after you’ve moved in. You are relaxed and your house is fully functional. You think to yourself: “I never moved house this fast and easy!”

               

              Are you ready to get serious about buying a house? Contact us at info@inexpatfin.nl or fill in the contact form below to set up a free mortgage consult by phone, videochat or in person.

               

              Or, read more about mortgages in the Netherlands.







                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.

                Buying a house vs renting one

                Did the Netherlands become your home more than you consider your home country to be? We have some great news for you! Expats are allowed to buy property in the Netherlands. Whether you see yourself live in the Netherlands forever or you think about buying a house for a good investment. Let’s go through all the benefits of buying a house in the Netherlands. 

                 

                This is why buying a house financially exceeds renting one by a mile.

                How do the monthly mortgage payments and rental expenses stack up? 

                 

                Let’s start by comparing monthly expenses. To do this, we will use an example of a typical 75m2 apartment in Amsterdam.

                You can expect to pay around €1500 a month when renting an apartment of 75m2 in Amsterdam. If you would buy the exact same apartment you would have to pay about €500.000. You could fully finance this with an annuity mortgage with the interest fixed at 1,75% for 10 years. This would mean your gross monthly expenses are €1667, net €1567 (net = gross – tax rebate). This seems a bit higher than the monthly rent.

                However, the monthly mortgage payment consists of two elements, the interest payment and loan repayment. The average gross monthly interest payment over the full course of the mortgage is €279. This amount is the amount you need to pay the bank for closing the loan. Meaning, you will never see this money again. The rest amount, the average loan repayment, is €1388 a month. After paying this month after month, in about 30 years, you will have paid off your full mortgage.

                So, at first glance the total mortgage expenses seemed like they were a bit higher than the renting expenses. But if you compare the money that you are throwing away, the interest payment to renting expenses. This makes buying a much better investment than renting. 

                Also noted, when renting a property you can expect annual rental price increases due to inflation. Over time, this will make a big difference in the money you will lose. In case of a mortgage, yearly increases don’t exist. So you will never have to worry about inflation adjustments! 

                What happens when I move abroad?

                 

                Over time you might consider moving abroad after living in the Netherlands for 10 years. Considering the example above for the 75m2 apartment in Amsterdam, your remaining mortgage debt will be €353.670 (started at €500.000).

                Disregarding any house price increases or decreases, you will receive €500.000. The remainder of the debt will go to your bank account: €500.000 – €353.670 = €146.300. A nice return. Do you need to pay tax over this? No!

                When moving abroad, renting out your apartment is another option. With a normal mortgage, most banks won’t allow this, as it might lower the value and renters can gain certain rights.

                In this case, you could switch your mortgage to a buy-to-let mortgage, which is designed for the renting purpose. The interest will be a little bit higher and one of the conditions is that you can only finance up to about 70% of the value. In this scenario, after 10 years, this is the case, so renting out your place could be an interesting investment.

                Explore your options with Independent Expat Finance!

                 

                If you want to explore your options, you can reach out to our expat mortgages specialists. Just fill in our contact form down below! Read more about expat morgages or expat insurances here! 







                  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.

                  I bought a home and was wondering if I can include renovations in the mortgage?

                  You bought a beautiful home but the bathroom is a bit run down and needs some work. Or you bought a real fixer-upper that completely needs to be re-done. We often get the questions from clients how this works with a Dutch mortgage. It’s not too complicated but understanding how it works can save you a big head-ache later on.

                  The maximum loan-to-income (LTI) and the loan-to-value (LTV)

                   

                  When you buy a home and apply for a mortgage banks look at two things: the maximum loan-to-income (LTI) and also the loan-to-value (LTV). You can never finance more than the lowest of the LTI or LTV. Including renovations generally has implications on the LTV, as you can expect that the renovations will increase the value of the property.

                  How many renovations can i include in my mortgage?

                   

                  In order to determine how many renovations you can include we need to look at the LTV of the home. The appraiser will ask you to submit a specification of the renovations and how much you estimate it will cost before he or she visits the property. Anything which is attached to the home can be considered renovations, but be aware furniture is not for example. When the appraiser prepares the valuation report they will put two market values in the report rather than one: one value before renovations and one after renovations.

                   

                  As a rule of thumb you can count on about 70% of the estimated costs of the renovations to be included in the value after renovations. This means the other 30% need to come from your own savings. So if your own savings are limited, then you can probably not include too much renovations in the mortgage. The money the bank is willing to put up for the renovations (70%) and likewise your part (30%) will be put on a designated bank account. Any receipts or invoices can be submitted after which the bank pays this out to you.

                  Let us go through a scenario to clarify how it works:

                   

                  An apartment is listed for 350.000 euro on the market. Based on your income (LTI) the maximum mortgage you can get is 400.000 euro. It is a seller’s market and therefore you place a bid of 375.000 euro. Your bid gets accepted. On top of the one off fees and taxes for buying the home you have a buffer of 15.000 euro. You are contemplating to renovate the apartment and would like to know how much renovations you can include in the mortgage. 

                   

                  Firstly, to be a bit cautious in our calculation, it is possible the value before renovations will be 5.000 euro less than what you paid for the apartment (as you placed a bid 25.000 eur over the asking price). So let’s put down a value of 370.000 euro before renovations. This means 5.000 is gone from your buffer and you have 10.000 euro left. If we approximately go with the general 70:30 rule on renovations it means that if you can put down 10.000 euro the bank can chip in 20.000 euro for renovations.

                   

                  So, you can include renovations for about 30.000 euro in your specification that you share with the appraiser. If the value before renovations is like we assumed 370.000 euro then we can expect the value after renovations to be 390.000 euro. This is within your LTI limit of 400.000 euro, so you could get a mortgage for the lowest limit of the two which is 390.000 euro.

                   

                  So in this case it is possible but you are limited to renovations for about 30.000 euro.

                  How can we help you with a property which needs some work?

                   

                  If you are interested to buy a property which needs some work, definitely reach out to us early in the process so that we can run the numbers with you and see what is possible. Or, read more about expat morgages or expat insurances here! 







                    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.

                    Moving to the Netherlands as an expat – what to expect?

                    You’ve decided to take the plunge and are moving to the Netherlands to work here as an expat. You’re excited about this new adventure and you might be wondering what the Dutch are like, what the unwritten rules are, and just generally what you can expect from your soon-to-be home. Whether you come from another European country, the Americas, or Asia, you’re bound to notice some differences about the Dutch culture. We made a list of the five most noticeable things you will find out about the Dutch when you’re moving to the Netherlands.

                    1. Bikes Everywhere

                    If you’re moving to the Netherlands and you don’t know how to ride a bike, you better learn quickly. The Dutch ride their bikes pretty much everywhere. If you can reach your destination in biking in under half an hour, the Dutch will go by bike. And it’s not like they don’t have cars. They do, as the traffic jams will prove. They simply have the habit of riding their bikes.

                     

                    Children learn two things from a very young age: swimming (because there’s water everywhere) and riding a bike. Also, given the parking fees in some cities, the bike is your best option to save money (and boy, the Dutch do not like to spend money on things they find wasteful).

                     

                    So, start practicing now or take a biking class once you arrive in the Netherlands. And when you do go biking in the Netherlands, please don’t wear a helmet. At least, not if you don’t want to be the laughing stock of your company or neighborhood or frankly, anywhere you go.

                    Hey, where are you going with that helmet?

                    Bikes in the Netherlands - Independent Expat Finance

                    2. No privacy

                    The Dutch are very open people. There aren’t many taboos left in our society and we talk about almost anything. The Dutch lack of privacy is very clear at night when you walk past their houses. You will see families sitting in their living room, watching tv, or having dinner. That’s right, the houses in the Netherlands have big windows that aren’t decorated with drapes or anything to keep glaring eyes out. The Dutch can be very unapologetic: I do whatever I want in my house and I don’t care who sees it or what their opinion is. By the way, it’s totally cool if you look inside. Just nod if someone sees you do it.

                    Another thing that the Dutch are known for is their directness. You may find yourself being ‘interviewed’ by your colleagues or neighbors. And you might think that the questions are a little too personal, but your Dutch colleague will find his questions perfectly normal. Feel free to interview your colleague back by the way. Go ahead, ask him anything, except don’t ask him how much he earns — that’s a total no-no.

                    3. Bad customer service

                    Customer Service in the Netherlands - Independent Expat Finance

                    I don’t want to discourage you from moving to the Netherlands, but the one thing expats in the Netherlands complain about is bad customer service. If you’re used to being treated like royalty by customer service in your country, you’re in for a rude awakening.

                     

                    Expats often feel as if they are treated like a number. You just have to realize that in the Netherlands, everybody has the same rights and duties. Expats are not an exception. Equality in the Netherlands is very important so whether you’re a cleaner or a CEO does not matter how you are treated at places like city hall, the bank, the supermarket, or your phone provider. Also, showing up somewhere doesn’t mean you will be helped. Because when it’s time to go for the customer service agent, it’s time to go. People can come across as uninterested and unwilling to look further than your question and going the extra mile.

                    4. Liberalism

                    The Netherlands is a very liberal place. Besides marijuana and prostitution being (semi)legalized, abortion is legal until 24 weeks, and euthanasia is also legal under very strict law. Also, same-sex marriage is legal and being open about one’s sexuality is something normal in general.

                     

                    But don’t think that the Dutch are lawless. Although they complain a lot about the many rules in society, they do make sure to follow the rules to a T. There’s also weird schizophrenia in the general culture where they feel like everybody should be themselves and anything should be possible but at the same time believe that you should just act normal. What’s normal? Not standing out too much and living by the (unwritten) rules.

                    5. Happiest place on earth

                    Tulips in the Netherlands - Independent Expat Finance

                    And you thought Disneyland is the happiest place on earth. Turns out, the Netherlands is one of the happiest places on earth. What better reason for moving to the Netherlands do you need? Surveys have consistently shown that the Dutch rate their lives in the top 10 of the happiest people on earth (we’re currently at number 6).

                     

                    It might have something to do with the working hours. Dutch people value their spare time a lot. We generally don’t do overtime, especially not unpaid overtime. We love hanging with our family and friends. Although the Dutch, in general, don’t have really close-knit ties with their extended family, they do value their close family a lot. Parents play a big role in their kids’ lives with moms often working part-time to be with their kids and dad’s having a ‘papa-dag’ (daddy-day) once a week.

                     

                    The Dutch men and women are emancipated. The sexes are perceived as being equal although the traditional roles haven’t been rearranged in most families yet. Men value taking care of their kids just as much as women do though.

                    Wait, there’s more!

                    There are so many more things that can be said about the Dutch but in a list of five, we can’t include everything. These are things that didn’t make the list but might be interesting to know as well:

                    • Almost everyone speaks English. In fact, the Dutch are the best non-English speakers in the world according to this study.
                    • Guns are forbidden.
                    • Despite their openness, it’s hard to make Dutch friends.
                    • Credit cards aren’t widely used.
                    • You can drink the tap water.
                    • The houses are tiny.
                    • There’s universal healthcare insurance.
                    • The Dutch are very straight forward almost to the point they’re being perceived as rude. If they have an opinion, they will tell you about it.
                    • The Dutch don’t like drama. They are very down to earth people.
                    • Dutch don’t like ‘fakeness’– they might consider you being overly nice.
                    • The Netherlands houses some magnificent artwork from their great Dutch painters.

                    Still planning on moving to the Netherlands?

                    If you’re moving to the Netherlands, you’re probably going to have a great time! Sure, you will need some time to adjust to the customs and ways of the Dutch, but that’s normal for every country. Don’t be afraid to offend people because we aren’t easily offended.

                     

                    Welcome to the happiest place on earth!

                     

                    In need of information about the move to the Netherlands, expat mortgages and / or expat insurances? We are happy to help. Get in touch and fill in the form below!







                      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.