So you finally got your Dutch bank account, and maybe you even managed to open it without a BSN. You've also arranged other administrative matters such as your health insurance and have registeredwith a GP.
But now you are thinking about your living situation and wondering if it is better to buy a home or rent? Whether you want to make a valuable investment or are simply ready to settle down in the Netherlands, it's important to know how buying a home in the Netherlands actually works.
To finance buying a home in the Netherlands, there are three important things to keep in mind: your maximum possible mortgage, future monthly costs and one-time buyer's costs.
Maximum mortgage: what is possible?
Before you start looking for your new home and getting a mortgage, it is good to know what your financial possibilities are. You can get a first impression of your options by making a simple calculation of how much you can borrow.
This amount is based on your income and possibly that of your partner. Of course, it does not mean that you have to borrow this amount in full, as you might want to base your mortgage on how much you are willing to pay per month.
Such a calculation is always only an estimate. Exactly how much you can borrow depends on your personal situation and your mortgage conditions. Do you have more questions? Then you can always schedule an orientation appointment with a mortgage advisor.
Monthly costs: Interest and tax benefits
But what does the mortgage look like in the Netherlands? There are several decisions that will affect the interest rate and monthly payments for your mortgage:
1. Linear or annuity mortgage
There are several types of mortgages in the Netherlands. But only with the linear and the annuity mortgage you are able to deduct your mortgage interest from your taxes. With the linear mortgage, you pay off the same amount every month.
This means you pay off your mortgage faster and the monthly amount decreases over time. With the annuity mortgage, the total monthly amount you pay remains the same every month, so you pay more interest in the initial years, with the repayments of the loan increasing later on.
2. Variable interest rate or fixed-interest period
Getting a fixed-interest rate for a certain time period is often the best option, but make sure you get proper advice from your mortgage advisor. While locking it in for a longer period often results in a higher interest rate, it also provides more security.
3. National Mortgage Guarantee (NHG)
You may be able to use the National Mortgage Guarantee (NHG) for your Dutch mortgage. There are costs associated with this, but it often results in a lower mortgage interest rate. In addition, it can act as a safety net in case you are no longer able to pay the mortgage yourself (e.g. in the event of divorce or job loss).
4. Energy label
The energy label of your future home can also influence your mortgage. For example, with ABN AMRO, you can receive a discount on your mortgage if your home has, at least, a B-energy label.
Tax benefits and other monthly costs
The interest on your linear or annuity mortgage can potentially be deducted from your taxable income. In 2024, the deductible mortgage interest rate in the Netherlands is 36.97%, so you'll get about one-third of the interest you pay back as a refund.
However, the rules for this can change every year, so make sure to get proper advice. In addition to the mortgage costs, you also pay taxes associated with owning a home in the Netherlands, such as the eigenwoningforfait (a tax for homeowners) and the Onroerend Zaakbelasting (OZB), which is a real estate tax that is paid to your municipality.
Buyer's costs
In addition to the monthly mortgage costs, there are also expenses that you cannot finance through a mortgage and must pay upfront when purchasing the property. These consist of purchasing costs and financing costs, for example: transfer tax, notary fees and mortgage advisor fees.
Check out this overview from ABN AMRO of all the costs involved in buying a house.
Good to know: Are you under 35and does the house costless than €510.000? Then you may not have to pay transfer tax. Keep in mind that you can only take advantage of this exemption once.
ABN AMRO: Experts in expats
For over 25 years, ABN AMRO has been the go-to financial partner for expats, diplomats, civil servants and international organisations. They provide products and advice for payments, savings, insurance, credit cards, mortgages, loans and investments.
All the expat advisors at ABN AMRO speak fluent English and their website has tons of financial tips and information for expats (also in English). You can also schedule a free orientation meeting with an ABN AMRO expert to have all of your mortgage questions answered.
Calculate your estimated monthly mortgage payments with the ABN AMRO Mortgage Calculator.
Open a bank account without a BSN
For expats relocating to the Netherlands, one significant hurdle has been needing to have a Citizen Service Number (BSN) to open a bank account. Fortunately, ABN AMRO has recently made it possible to open a bank account in the Netherlands without a BSN. This means that you can potentially set up your account before you even move to the Netherlands via the ABN AMRO banking app, so your first pay check or transfer can await your arrival.
