Mortgage in the Netherlands
Are you thinking of buying a home in the Netherlands? As an experienced mortgage advisor, we know all about mortgages for expats. Below, we explain more about getting a Dutch mortgage and some of the peculiarities:
- Kosten koper (k.k.)
- Nationale Hypotheek Garantie (NHG)
Mortgage broker or bank
Mortgages in the Netherlands can be taken out directly from a bank or other institution. To ensure you have access to the best options, however, you can also call in the services of a broker who investigates mortgage possibilities with different banks. A mortgage broker prepares a financial overview, compiles and submits documentation, corresponds with banks (so you don’t have to) and offers insurance.
For both banks and mortgages brokers, the following applies.
- The first meeting (in Dutch: ‘kennismakingsgesprek’) is usually free (it is with us).
- The fee is roughly between €2,000 and €3,000 (our fee of €1,995 is at the lower end of the scale).
- Services differ. Always ask which services are provided.
Being mortgage brokers ourselves, we take pride in our independence. We aren’t bound by any specific bank and are therefore ideally placed to negotiate the mortgage best suited to your needs.
What is ‘kosten koper’? (additional costs when buying a house)
Dutch real estate ads usually mention that something called ‘kosten koper’ or ‘k.k.’ is not included in the asking price. These are additional costs of between four and five per cent that you are obliged to pay when you buy a property. If the advertisement mentions ‘vrij op naam’ or ‘v.o.n.’ after the property price, this indicates the extra costs are included in the listed price. Freehold, as it’s called in English, often applies to more recently built properties.
The main difference between ‘kosten koper’ and ‘vrij op naam’ is that the latter entails no conveyance tax, no costs for a deed of conveyance and generally no appraisal charges. In both cases, you must of course also pay the mortgage broker and notary fees. The notary usually combines the ‘kosten koper’ additional costs and distributes the payments. Fortunately, many of these costs are tax deductible (see the next paragraph).
What is ‘hypotheekrenteaftrek’? (mortgage tax relief)
‘Hypotheekrenteaftrek’ is a tax deduction on the interest you pay for an annuity or linear mortgage (and in some instances for an interest-only mortgage), provided you live in the property. Are you renting your house out, even periodically while living elsewhere? Then your property is considered an investment and you are not eligible for mortgage tax relief. If the interest on your mortgage is tax deductible, you will receive an annual or monthly tax refund from the Dutch tax office (Belastingdienst).
The rate for tax deduction gradually declines for incomes in the highest tax bracket. The deductible mortgage interest rate for 2018 is 49.5 per cent. This is down from 50 per cent in 2017 and will drop by half a percentage point each year until it has reached 38 per cent.
What is ‘Nationale Hypotheek Garantie’? (National Mortgage Guarantee)
In Holland, a mortgage of 100 per cent of the property value is not unusual. Understandably, mortgage providers would like some additional security in such instances. The National Mortgage Guarantee ensures this by providing a safety net should you at some point no longer be able to meet your mortgage obligations.
The Dutch National Institute for Family Finance (NIBUD) has devised a set of criteria for responsible lending and borrowing. A mortgage with National Mortgage Guarantee matches these criteria. This means that you won’t borrow more than you can afford, and the mortgage provider doesn’t have to worry about your monthly payments.
Want to know more?
Buro SEB charges a fixed mortgage broker fee of €1,995. During the first meeting at our office in the centre of Leiden or via Skype, we will discuss your wishes and get acquainted. This is of course free of charge. Whether you are considering moving to the Netherlands or already live here, we can make your Dutch home a reality.
Do you have any questions, or would you like to make an appointment? Call us on +31 (0)71-203 22 75 or e-mail us at firstname.lastname@example.org.
P.S. Just a quick word about Buro SEB. The name stands for ‘Buro Sander en Bob’, named after the owners: Sander and Bob, who were mortgage advisors at one of the biggest Dutch banks for a good number of years. They started Buro SEB to shake up the business and offer the best possible mortgage advice: personal, independent and at a very reasonable rate.
2311 GE LEIDEN
071 203 22 75