Before you buy a property in the Netherlands, ask yourself: what type of property do you want to buy? Are you planning to buy an existing or newly-built apartment? Are you planning to renovate? Where do you want to live? What about kids? The next steps are to understand how do mortgages work and how much you can borrow in the Netherlands.
Your maximum mortgage amount depends on the loan-to-income ratio (LtI). The loan-to-income determines how much mortgage you can afford. The loan-to-value determines how much mortgage the bank is willing to give based on the value of the property.
Scenario 1: if you plan to purchase a property appraised at € 500,000, and your loan-to-income is € 450,000; then the bank borrows you € 450,000. The amount of € 50,000 should come from your savings.
Scenario 2: if you plan to purchase a property appraised at € 500,000, with a loan-to-income of € 550,000, the bank borrows you € 500,000.
The bank always borrows you the lowest of the loan-to-income OR the loan-to-value.
Online calculators are not accurate enough to determine your maximum mortgage. We advise you to get a free personalized mortgage report. First, we arrange a 15-minute call to learn more about your goals. We ask you to upload documents to our online portal. We go through your online mortgage report and discuss different mortgage scenarios. What’s next? Now you are ready to search for your dream home.
The maximum mortgage amount you can finance is 100% in the Netherlands. For example, if you plan to purchase a home appraised of € 500,000, the maximum loan amount you can borrow (loan to value) is € 500,000.
You can get a 100% loan to the value of your property purchase price. When buying a property in the Netherlands, you must pay closing costs, including property taxes, insurance, notary, and more. In other words, closing fees include all services and expenses required to secure a mortgage. Mortgage closing costs depend on the amount you’re planning to lend and the value of your property. Check the list of mortgage costs below.
You pay 2% of the property price to the Dutch Tax Authorities. From 2021 people aged 18-35 will not pay a transfer fee if they purchase their first property. You are not obliged to pay a property tax when purchasing a newly build property.
A real estate agent works with a fixed fee of between € 2,500 to € 5,500 or with a commission of around 1.25%. You can find real estate agents that charge a fixed fee while others charge a commission depending on the property price.
A valuation report is a mandatory rule when applying for a mortgage in the Netherlands. Your mortgage lender requires a professional appraisal to check the value of the house.
Movable goods, if applicable.
Notary (deed of ownership, deed of mortgage, public land records). Notary fees in the Netherlands vary between € 1,500 to € 2,000.
Renovation or additional costs.
NHG (National Mortgage Guarantee is a scheme that protects you and your mortgage lender). It helps you repay your mortgage if you cannot do it due to disability, divorce, or unemployment. You can get an NHG protection if your property price does not exceed € 325,000 of the property’s value. You only need to pay a one-time fee of 0.7% of your mortgage amount. If you are planning to borrow € 175,000, your NHG fee will be € 1,225.
Mister Mortgage charges a fixed fee for a mortgage advisory and brokerage. For more information, check our pricing page.
The total amount of closing fees depends on the purchase price. All closing fees are payable on the day when you sign the transfer of ownership at the notary.
When your bid is accepted, you sign a purchase agreement between you and the seller. Mortgage pre-approval does not exist in the Netherlands. After the purchase agreement is signed, the next step is to arrange your mortgage. The seller asks to deposit 10 % of the purchase price to protect themselves if you cannot get a mortgage approved. If you do not have 10% savings available, your mortgage advisor can arrange a bank guarantee. You pay a one-time fee to secure a 10% deposit.
A national mortgage guarantee is a Dutch system that protects you and your mortgage lender. When you participate in the NHG scheme, you can make sure that your income will match your mortgage. If you cannot make a monthly payment due to unemployment, disability, divorce, or your partner’s death, the NHG scheme can help you deal with difficult situations.
The process of buying a home varies by customer. You can speed the process up by starting to collect documents or looking for a home. As soon as you find a home, contact us. We submit all required documents for the mortgage application. The final mortgage approval can take between 5 to 10 business days.
Mortgage advisers represent your needs and find a mortgage that fits your financial situation. Mortgage advisers work with different mortgage lenders. Banks only present one product while the mortgage broker can compare more than 30 mortgage products.