Interest rates are a very much a hot topic at the moment, but for savvy buyers the Dutch housing market still has plenty to offer. Here’s a round-up of the latest news on the home front.
Interest rates rise and fall
Interest rates in the Netherlands have risen very slightly in recent weeks, prompted in part by the global economic instability brought on by the war in the Middle East.
But given the continuing pressures in the Dutch housing market – high demand and a shortage of supply – this was only to be expected anyway, says Richardo Cruz Fortes from Expat Mortgages.
The rate for 10-year fixed-rate mortgage is currently hovering around 4.3%, while you should be able to get a five-year fixed rate of between 3.7% and 4%. However, how much you can actually borrow depends on a number of other factors, including the property’s energy label, whether you are a single person or a couple and how much you have in savings.
To get a rough idea, use an online mortgage calculator but don’t forget to ask a mortgage advisor for a tailor-made estimate as well.
Interest-only mortgages
ABN Amro, Rabobank and ASN have all announced plans to restrict interest-only mortgages, following warnings about risks from the Dutch and European central banks, and financial services regulators.
In January, Rabobank said it will cap the interest-only portion of new mortgages at 30%, down from the current 50%, with an absolute maximum of €150,000. ABN Amro is reducing the interest-only share to 30%, but with a maximum ceiling depending on the value of the property and ASN has also cut back to 30% with no ceiling.
“There have been a few raised eyebrows about these restrictions but as a mortgage advisor I have to say that the best mortgage is one you have paid off,” says Richardo. “So while interest-only mortgages can be useful for some people, if you can pay back your debt, you should.”
Mortgage tax relief
The new government has now published its plans for the coming years and has decided not to make any more changes to mortgage tax relief, which remains, currently, at around 37%, which is good news for would-be home owners.
The government also wants to make it easier to split and extend existing properties to create more homes – which could also be good news for buyers, especially those looking to get a foot on the housing ladder.
Rent or buy
If you are wondering whether it would be sensible to stay in rental accommodation or to take the plunge a buy a place, there are several things you need to think about.
For a start, how long are you planning to stay in the Netherlands will help determine whether buying makes financial sense, as does your type of work contract and whether or not you have savings.
To help you make up your mind, Expat Mortgages has developed a special tool which you can use to get an idea of what would make sense. Test it out here
Stay sharp with AI tools
And while AI has a lot of value as a way of gathering information, people using it to find out more about buying a home need to ask themselves if all that data is actually what they are looking for, says Richardo.
“So much of buying a home is about trust between you and your broker,” he says. “I would say use AI as a tool to find out basic stuff, but use the expertise of the person you are working with to buy a home. Double check all AI calculations and make sure they fit you personally. And make sure you talk to a human being as well.”
Ready to take the next step? Start with the Expat Mortgages FAQ and if you can’t find what you’re looking for, their live chat team is on hand to help instantly. Or you can book a free introductory meeting with one of their advisors.
