When purchasing a home, you have the option to choose a mortgage with the Dutch National Mortgage Guarantee (NHG). This ensures that the Dutch Homeownership Guarantee Fund (Stichting Waarborgfonds Eigen Woningen) backs your mortgage, reducing both your risk and interest rate.
NHG limit increases to EUR 435.000 in 2024
What does it mean? The housing market becomes more accessible to buyers with low or middle incomes. The National Mortgage Guarantee is a government insurance scheme that protects borrowers from residential debt if the borrower cannot afford monthly payments. If you plan to buy a property for new or existing property up to EUR 435.000, you will be charged the NHG fee to back up your mortgage.
National Mortgage Guarantee explained
NHG or Nationale Hypotheek Garantie or National Mortgage Guarantee is a unique Dutch system that aims to protect you and your mortgage lender. The Dutch Government backs the scheme and intends to help homebuyers get a mortgage more quickly. This was introduced in 1993 to reduce the risk of taking out a mortgage and to make homes more affordable.
With NHG, the risk is partly covered, enabling lenders to offer a lower interest rate. When you buy a house in the Netherlands, you can choose the safety net provided by NHG. The NHG safety net covers your mortgage if you can’t afford your monthly payments.
When you participate in the NHG scheme, you can make sure that your income will match your mortgage. A drawback is that this only applies to mortgages under a certain threshold, which many properties in larger cities exceed. The other option is a conventional mortgage guaranteed by a banking institution.
NHG requirements
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The property price is no more than € 435,000 from 2024 or 100% of the value of the property. The rule applies to both: existing and newly built properties.
Why do I need coverage of NHG?
Imagine a scenario where you lose your job or your partner passes away. Your entire life will be upside down, and everything will change. It can take months to rebalance your finances. If you are not able to make your monthly payments but you have the NHG-protected mortgage, you can ask for help. Your mortgage lender and NHG will assess your situation and come up with a financial solution. In this case, you will be able to keep your property and avoid losses when selling it.
NHG protects you if you
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lose your job
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get a divorce
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are not able to work due to disability
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(or your partner) passes away
How much does NHG cost in the Netherlands?
There’s a one-time fee of 0.6 % of your mortgage amount. Let's say you are planning to borrow € 390,000, so your NHG (the Dutch National Mortgage Guarantee) fee will be € 2,340.
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