Buy-to-let mortgage

A buy-to-let mortgage in the Netherlands

An investment mortgage (or buy-to-let mortgage) works differently than a residential mortgage. Residential buyers can get a loan up to 100% loan to value. A rule of thumb is that if you plan to invest in a property, you must pay down 30% of the property price, which means you can get a 70% loan to value. Higher interest rates apply to investment mortgages. Expats living in the Netherlands can invest in buy-to-let.

Requirements for buy-to-let mortgages

  1. Mortgage lenders finance 70% of the loan value. The rest should come from the savings.
  2. A buy-to-let property is used for long-term occupation, which means no short rentals or AirBnB.
  3. You reside in the Netherlands.
  4. The (expected) rent covers the mortgage fees, the maintenance fees, taxes.

What happens with my mortgage if I need to move away after 5 years. What options do I have?

You have 3 options:

  1. You can sell your home and repay your mortgage. 
  2.  You can refinance your mortgage from residential to buy-to-let mortgage. In this case, you rent to rent your property out. When you close a mortgage in the Netherlands, you sign a mortgage deed with your mortgage lender. Mortgage deed conditions vary per mortgage lender. For this reason, your mortgage lender must permit you to change your mortgage.
  3. If you move away for a fixed term, no longer than two years, you can ask your mortgage lender permission to rent your property out. It is good to know that you are not allowed to rent your apartment with a residential mortgage. It would be best to get written permission from your mortgage lender, allowing you to rent out your apartment. We can help you get the approval to rent your apartment for a maximum of up to 24 months. If you plan to move away for more than 24 months, contact us.  

Reasons to invest in real estate.

  1. You increase your cash flow if your property is rented out.
  2. The property’s value could increase.
  3. You use the bank’s money to invest.

Reasons not to invest in the real estate

  1. The initial costs of purchasing an investment property.
  2. The on-going fees like mortgage, maintenance, management fees, taxes.
  3. Your property can stay vacant.
  4. The property’s value could decrease.
  5. You put your eggs in one basket.

Alternative ways to invest your savings

  1. Invest your money in various asset classes. Smart investments can bring you a higher return in the long term than real estate. For more information, please contact us. We guide you through investment opportunities in the Netherlands and help you to reach your future financial goals.
  2. You invest your savings in bonds or stocks. 
  3. Keep your savings in high-yield savings accounts.