Buying a home in the Netherlands is an increasingly popular choice for expats, especially those planning to stay for several years. Dutch mortgage rates are competitive, the tax benefits are generous, and building equity beats paying rent into someone else's pocket. But the process has some unique features that can surprise foreign buyers.
Can Expats Get a Dutch Mortgage?
Yes, absolutely. Dutch banks and mortgage providers regularly lend to expats. However, your situation may affect how much you can borrow and which lenders will work with you. Factors that matter include:
- Employment contract type: Permanent contracts (vast contract) are strongly preferred. Temporary contracts or probation periods make it harder
- The 30% ruling: This significantly impacts your maximum mortgage because lenders base their calculations on your taxable salary, not your gross salary
- Length of time in the Netherlands: Some lenders prefer applicants who have been employed for at least 6-12 months
- Nationality: EU citizens face fewer hurdles; non-EU citizens may need to demonstrate stable residence status
How Much Can You Borrow?
The maximum mortgage in the Netherlands is determined by two main constraints:
1. Income-based maximum: Based on your gross annual income, the type of interest rate (fixed or variable), and any existing debts. The standard calculation allows roughly 4.5-5x your annual gross income, but this varies.
2. Property value: Since 2024, you can borrow up to 100% of the property's market value (woningwaarde). Any costs above the purchase price (transfer tax, notary fees, mortgage advisor fees) must be paid from your savings.
The 30% ruling catch: If you have the 30% ruling, lenders typically calculate your borrowing capacity based on your taxable income (70% of gross), not your full salary. This can reduce your maximum mortgage by 20-30% compared to someone earning the same gross salary without the ruling.
Some mortgage advisors specialise in expat mortgages and may be able to find lenders who treat the 30% ruling more favourably. It is worth consulting a specialist.
Types of Dutch Mortgages
The most common mortgage types in the Netherlands are:
Annuity Mortgage (Annuiteitenhypotheek)
Fixed monthly payments that gradually shift from interest to principal repayment over the term (typically 30 years). This is the most popular type and the only type that qualifies for full mortgage interest deduction on new mortgages.
Linear Mortgage (Lineaire Hypotheek)
You repay a fixed amount of principal each month, plus declining interest. Monthly payments start high and decrease over time. Total interest paid is lower than an annuity mortgage, but the early payments can be steep.
Interest-Only Mortgage (Aflossingsvrije Hypotheek)
You only pay interest, with no principal repayment during the term. These are no longer available as standalone mortgages for new purchases, but they can make up part of a combined mortgage structure in some cases. The mortgage interest on the interest-only portion is not tax-deductible for new agreements.
The Mortgage Application Process
- Get a mortgage pre-approval: Before house-hunting, get a preliminary indication of how much you can borrow. This is not binding but gives you a realistic budget
- Find a mortgage advisor (hypotheekadviseur): In the Netherlands, most people use an independent mortgage advisor. They compare offers across multiple lenders and handle the application. Fees are typically EUR 2,000-3,500
- House hunting and bidding: The Dutch housing market is competitive, especially in cities. You often need to bid above asking price and may face multiple-bid situations
- Purchase agreement (koopovereenkomst): Once your offer is accepted, you sign a purchase agreement. You typically have 3 days to withdraw without penalty, and the agreement usually includes a financing clause (voorbehoud van financiering) giving you 4-6 weeks to secure the mortgage
- Mortgage application: Your advisor submits the application. You will need payslips, employer's statement, bank statements, tax returns, and the purchase agreement
- Valuation (taxatierapport): An independent appraiser values the property. This is required by the lender and costs approximately EUR 500-800
- Mortgage offer: If approved, you receive a binding offer (offerte) detailing the terms, rate, and conditions
- Notary appointment (passeren): The final step. A notary handles the transfer of ownership and registers the mortgage. Both buyer and seller (or their representatives) attend
Costs Beyond the Purchase Price
Budget approximately 5-6% of the purchase price for additional costs:
- Transfer tax (overdrachtsbelasting): 2% of the property value (0% for first-time buyers aged 18-35 on properties up to EUR 510,000)
- Notary fees: EUR 1,000-2,000 for both the transfer and mortgage deeds
- Mortgage advisor fee: EUR 2,000-3,500
- Valuation report: EUR 500-800
- National Mortgage Guarantee (NHG): 0.6% of the mortgage amount (optional, for properties up to EUR 435,000, provides a safety net if you cannot repay)
Tax Benefits of Home Ownership
The Dutch mortgage interest deduction (hypotheekrenteaftrek) is one of the most generous in Europe. You can deduct mortgage interest from your box 1 income, reducing your income tax bill. At the top tax rate of 49.50%, the effective cost of mortgage interest is roughly half the stated rate.
Combined with currently competitive mortgage rates (around 3.5-4.5% depending on the fixed period), home ownership can be financially attractive compared to renting.
For more on building your financial foundation, check your BKR credit record before applying, and make sure your savings are optimised for your deposit.