Buying a house & getting a mortgage

At some point most families here ask the same question: should we keep renting, or buy? There is no rule that stops a non-Dutch citizen from buying property, and a residence permit plus a Dutch income is usually enough to get a mortgage. Here is how the money actually works, including the parts nobody explains well.

How much can you borrow?

• Banks lend mainly on income, roughly up to four-and-a-half times your annual gross for a couple, using national affordability norms. Your other debts (a car loan, a big phone plan on credit) reduce it.
• You can borrow up to 100% of the home's value, but not the buying costs on top. So you still need savings for the extras below.
• A fixed-rate mortgage over 30 years is the norm, with the interest fixed for a chosen period (often 10 or 20 years).

Transfer tax, and the exemption worth thousands

• For a home you will live in, transfer tax (*overdrachtsbelasting*) is 2% of the purchase price.
• First-time-buyer exemption: if you are 18 to 34 and the home is under a yearly price cap (around €525,000 in recent years, check the current figure), you pay 0% transfer tax, once. On a €400,000 home that is €8,000 saved.
• A home you will not live in yourself (buy-to-let, second home) is taxed at a much higher rate, so this is strictly for your own home.

NHG: a lower rate and a safety net

The Nationale Hypotheek Garantie (national mortgage guarantee) is available on homes up to a yearly limit (around €450,000, higher if you add energy-saving measures, check the current cap). It costs a small one-time premium (roughly 0.4% of the loan) and gives you two things:

• A lower interest rate, because the lender's risk is guaranteed, which often more than pays back the premium over time.
• A safety net: if you genuinely cannot pay because of job loss, disability, divorce or a partner's death, and have to sell at a loss, the guarantee can cover the shortfall.

The tax break that makes buying add up

Interest you pay on a mortgage for your own home is tax-deductible (*hypotheekrenteaftrek*), as long as the loan is repaid on an annuity or linear basis within 30 years. In practice this gives you money back at tax time and is a big reason buying can beat renting once you plan to stay a while. Note it interacts with the 30% ruling, so run the numbers, ideally with an adviser. See our income tax guide.

The real cost of buying (kosten koper)

Budget for these one-off costs on top of the price, usually about 4 to 6% of the purchase price for an existing home:

How the process runs

1. 1Get a mortgage adviser and a rough pre-approval, so you know your ceiling.
2. 2House-hunt on Funda; in a hot market, over-bidding is common, so decide your limit in advance.
3. 3When you bid, keep a financing condition (*voorbehoud van financiering*) so you can withdraw if the mortgage falls through.
4. 4You get a legal three-day cooling-off period after signing the preliminary contract.
5. 5The notary (*notaris*) handles the transfer and registers the deed. Keys in hand.