Mortgages

The best mortgage for an expat or international depends on lifestyle and personal circumstances. With some mortgages you have to start paying off the loan immediately along with the interest, whereas other mortgage types allow you to postpone repayments and only pay the interest instead.
Since the changes in 2013, the only kinds of mortgages that are eligible for the interest tax deduction (renteaftrek) are annuities and linear mortgage models, whereby the loan is repaid within 30 years via monthly repayments.

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Getting a mortgage
If you’re living in the Netherlands for a longer period, buying your own home might make more sense, financially and personally. Mortgages in the Netherlands usually run for a 20-to-30-year term, but it’s also possible to opt for a shorter period. Another thing that’s good to know: the interest you pay on your mortgage is partially tax-deductible.

• Check Welcome to NL for more information about living in The Netherlands.
• As an official partner we work closely with Holland Expat Centre South. Check their website for more information about living in the south of The Netherlands called Brabant.

Annuities mortgage (annuïteitenhypotheek)

In the early years of an annuities mortgage, your monthly payments are largely made up of interest and a small part loan repayment. Over time, as you gradually decrease your debt, the amount of interest you pay also decreases. Towards the end of the mortgage period, the balance reverses meaning you pay lower interest payments and higher loan repayments.

In the early years of the mortgage period, the annuities mortgage usually has lower monthly payments than a linear mortgage.

Linear mortgage (lineaire hypotheek)

With a linear mortgage you repay a fixed amount every month, plus the interest. Your debt is reduced every month, which also reduces the interest. A linear mortgage is useful when you want to pay off your mortgage as quickly as possible, although initial repayments are relatively high.

Interest-only mortgage (aflossingsvrije hypotheek)

With an interest-only mortgage you make no repayments on the loan, instead you just pay interest on a monthly basis. Companies only permit this kind of mortgage under certain circumstances, and you will need to repay the capital at a later date from savings or investment accounts.

Repay the loan
During the course of the mortgage term, you can switch between saving and investing, taking advantage of low-interest rates and investment opportunities, or seeking less risk in a savings account.

For expats and internationals, mortgages providers require proof of income via a permanent employment contract and also a statement from your employer (werkgeversverklaring) giving details over your contract and salary.

If you have a temporary contract, or work for a Dutch university as a PhD student or researcher, then you also need to provide a statement from your employer or institution confirming that your position is on-going or will become permanent.

Remember that your statement still needs to be approved by your mortgage provider before your financing is guaranteed.

This is a quick overview of the taxes, costs and fees involved when buying a house in the Netherlands. Always seek advice regarding your personal situation.

• Transfer tax (Overdrachtsbelasting): 2% of the purchase price. This is not negotiable.
  People aged 18-35 who are buying their first property in the Netherlands will not have to pay this transfer tax. The costs of this first property may not exceed €400.000 (Per 1-1-2023 €440.000,-).
• Bank guarantee (Bankgarantie): 10% of the purchase price (by transfer or written bank guarantee). This amout is not negotiable.
• Transfer contract (Leveringsakte): Around €450-€600.
• Mortgage contract (Hypotheekakte): About €650 and is tax-deductible.
• Estate agent fee (Makelaarscourtage): 1-2% (plus BTW) of the purchase price, if you asked the real estate agent to find a house for you.
• Valuation (Taxatierapport): About €700 and is tax-deductible.
• Additional costs (Kosten Koper | KK): All the additional costs that the homebuyer has to pay when purchasing a property, such as transfer tax and technical survey costs (around €425).
• Tax implications:
  – Mortgage interest payments are tax-deductible as long as the property / house is to be used as the main residence for a maximum of 30 years.
  – Tax deductions automatically disappear if you decide to leave the country but continue to own the property. As a non-resident taxpayer, you will not enjoy tax-deductible mortgage interest payments, so make sure the rent you receive covers both costs and interest.
  – Increases in the value of the house are tax-free as long as it is used as the main residence (no capital gains tax).
  – The 30% ruling may raise your chances of getting an appealing mortgage deal.