Why do I need a mortgage consultant?

Getting a mortgage consultant would give you several benefits. In general, it is important to understand how your mortgage works and a professional can explain everything to you, including the risks. As a first step, an expat mortgage advisor will help you define your budget, the monthly instalments and inform you about the requirements for a mortgage.


When you go directly to a bank you could choose only from a few financial products offered by only one money provider. A mortgage consultant however will analyse and compare the loan conditions and interest rates offered by several money suppliers and will find for you the optimal mortgage product based on your individual circumstances and financial resources, saving you time and money.


Another important reason for hiring a mortgage consultant: There are some money suppliers that are willing to work together only with a professional intermediary. So, your mortgage advisor has access to special financial and/or insurance products, which you do not have.


Mortgage consultants have already lots of experience with different clients in various financial situations, therefore they will be able to provide you with options and scenarios that had never crossed your mind. Hiring a mortgage advisor and choosing the right mortgage construction and money supplier could save you thousands of euros already in the first fixed interest rate period!  Moreover, certain money providers offer a so called ‘term interest’ (looptijdrente) which will result in even higher savings for you. Term interest is mainly available by money suppliers if you work with an intermediary, i.e. a mortgage consultant. See more about this topic below.


All in all, as the consultation fee is deductible from your income taxes, hiring a Mortgage Masters advisor can be only beneficial for you!


If I pay a mortgage consultant to arrange the mortgage for me, are there additional costs that I need to pay to the bank as well?

No, if you use our intermediary services, there are no additional costs involved towards the bank on the top of our fee regarding the mortgage.


What's the maximum mortgage amount I can borrow?

After a consultation with a Mortgage Masters advisor you‘ll have an excellent insight in your maximum mortgage capacity, but to have an estimation, generally it is four to five times your gross annual income or 100% of the property value, it depends on which one is the lowest. However, as the maximum mortgage is 100% of the property value, you will have to pay for all the additional costs.


Can I get a mortgage if I’m a self-employed expat?

Yes, you can, but the conditions are stricter than for an employee because the banks consider self-employment riskier. In this case your mortgage will be calculated based on your net income during the last three years and you need to prove it with annual figures and income tax declarations. If you have been an entrepreneur for more than three years, it is easier to get a mortgage.


Can I get a mortgage if I have a temporary contract?

Yes, you can, but under certain conditions. It helps a lot for example if your employer gives a statement of intention about extending your current contract to a permanent one. This can be easily indicated on a standard employer’s statement. If your employer is not willing to do this, the bank will look at your average income in the last three years.


Can I get a mortgage as a non-EU citizen?

Yes, you can. As a highly skilled migrant basically the same regulations apply to you as to a European expat, but you might face stricter inspection by the mortgage provider. The height of the maximum mortgage amount will vary.

What kind of documents do I need as an expat for a mortgage application?

In order to apply for a mortgage we will need some personal and financial information from you, as well as about the mortgaged property:

  • a copy of your and your partner’s passport
  • a copy of your and your partner’s residence permit*
  • a recent copy of your salary slip
  • a copy of your employment contract
  • original employer's statement
  • the tax department’s confirmation that you are covered by the 30% ruling*
  • proof about your savings or assets*
  • copy of the signed purchase agreement
  • original valuation report

  *(if applicable)


What is the process of buying a house in the Netherlands?

  • Determine the maximum mortgage capacity and an indication of your monthly instalments by consulting a Mortgage Masters advisor, so that you know in what price range you can look for properties.
  • Find a property within your budget either by searching on internet sites like www.funda.nl , www.jaap.nl , www.koopwoningen.nl and/or by hiring a real estate agent. Due to the current seller’s market, it can be pretty challenging to buy a house without an agent, therefore we can recommend that you hire one. Your agent will inform you about available houses that match your profile, s/he will make the appointments for you, assess the property, do the negotiations etc. Mortgage Masters has an extensive network of professional real estate agents, so in case you need help in finding one, please feel free to contact us.
  • Negotiations, bidding and technical inspection of the property: When you first make an offer on a property, you are not obliged to offer the asking price, you can negotiate. You can submit your offer directly to the seller or via your agent. The seller can accept it, make a counteroffer or reject it. If you need help in deciding what is a good offer, you can have the property technically inspected. We can arrange this for you.
  • The purchase contract: Once you agreed on the price and conditions with the seller, you will sign a preliminary purchase agreement with contingencies. By this you are committed to the purchase and you will be able to withdraw from it only if the requirements for certain conditions are not met, for example you cannot raise the necessary mortgage due to unforeseen conditions. If the purchase contract does not include contingencies and you still want to withdraw, you will usually have to pay a minimum of 10% of the purchase price. However, the Dutch law allows you a  ‘cooling-off’ period of three working days, meaning that if you withdraw from the purchase contract within 3 days from the date of signing, you don’t need to pay anything.
  • Appraisal and applying for the mortgage: When buying an existing property, you will need an appraisal report (taxatierapport). This report may influence your maximum mortgage amount and the interest rate. Based on the appraisal, your income and credit status, the bank will provide you with a mortgage offer.  Once the mortgage has been agreed, 10% deposit needs to be paid to the notary’s account (or you can ask for a bank guarantee). If you decide to cancel the purchase agreement without a valid reason, the seller will keep the deposit.
  • The Notary: The notary will first transfer the ownership of the house from the seller to you. Once the transfer deed is signed, you will also sign the mortgage deed and you officially become the proud owner of the house. Your mortgage will also have to be  registered in a mortgage register, which is also done by the notary.

What type of mortgages are there?

When it comes to financing your own home, the two most common types of mortgages are annuity and linear. To determine which one is the best construction for your personal situation, it’s best to consult your mortgage advisor.


Annuity Mortgage

In the Netherlands annuity mortgage is the most common form of mortgage. It has fixed payments for the  duration of the fixed-interest period.

In the first years, these payments are mostly made up of interest, with a small capital repayment. Hence there is a large tax relief in the early years. The annuity mortgage is optimal for people who in the early years would like to have a large tax refund and anticipate to have enough money or income later to be able to make the repayments without being entitled for a tax rebate.


Straight Line/Linear Mortgage (level repayment or linear repayment scheme)

A linear mortgage combines the monthly capital repayments with decreasing monthly interest payments, so the loan is repaid yearly in equal instalments (i.e. linear). The linear mortgage in the beginning involves higher payments than an annuity mortgage, but the interest is decreasing every year resulting in a faster reduction of the debt.


There is also a possibility to combine Annuity and Linear mortgage constructions. In this case you would have approximatively the same net instalments for the duration of 30 years.


Interest-only mortgage

With an interest-only mortgage you only pay interest on the mortgage loan each month, but there are no repayments included. This means that you do not build up any assets with the mortgage that you can use to pay off the mortgage debt. When selling the house, or latest at the end of the term, you have to pay back the entire loan.


What is National Mortgage Guarantee (NHG - Nationale Hypotheek Garantie)?

The Dutch government offers a ‘safety net’ in case you are no longer able to pay your mortgage due to certain changes in your personal life like work disability, unemployment, divorce etc. In 2023 NHG will cost you 0.6% of the total loan, which you can earn back easily by getting a high discount on your mortgage interest rate as the lender runs a lower risk. In order to be eligible for NHG you need to meet certain requirements. The most important condition as of the 1st of January 2023 is that the purchase price cannot be more than € 405,000 (incl. renovation costs) or in case you would like to invest in energy saving measures, the NHG limit can go up to maximum € 429,300.


What is ‘term interest’ (looptijdrente) and how can I benefit from it?

Term interest is the average interest rate that you pay during the whole duration of your mortgage. By time, as the ratio between the loan and the market value of the house improves, you get to a lower risk-class, so your interest rate will be lowered. Therefore, when taking out a mortgage it is wise to calculate based on the term interest and not only the initial interest rates.


How does term interest work in practice?

A mortgage is a loan that you need to repay. The amount of the repayment consists of a basic interest and a risk-premium. The maximum mortgage you can take out is 100% of the market value of the house. If you take out less than 100% mortgage, then the risk for the money provider is obviously smaller. The risks are categorized in classes. Through the monthly repayments after a while you will end up in a lower risk class, therefore your risk-premium will be lowered as well, resulting in lower interest rates. Some money providers lower your interest automatically, by others you need to request it yourself. By some lenders it is possible to lower your interest rate during the fixed interest rate period, by others only at the end of this period, but all in all through lower interest rates your monthly instalments will be lower as well and you will be able to save during the whole running time of the mortgage.


What is a mortgage risk premium?

When taking out a mortgage, the bank assesses the risk of failing to repay the mortgage debt (in full). For that risk, the bank charges up to 0.5% extra interest on top of the base interest. This surcharge is applied if the mortgage that you take out is relatively high in relation to your home value (for example 100%). If you have repaid a substantial amount or if your house is worth more, you fall into a lower risk class and the risk premium may be canceled or reduced. The savings can amount to thousands of euros.


If you have a mortgage with a National Mortgage Guarantee (NHG), you (almost) never have to deal with a risk surcharge.


What is a building fund account (“bouwdepot”) and how does it work?

If you are going to renovate the house, you can co-finance this renovation in your mortgage. This is also called a building fund account. With this account you can pay the costs for renovating or rebuilding an existing home, or for the land and the construction phases for a home that still needs to be built. The building fund account will be a separate account with the same lender.


If you are going to request a building fund account, you must take into consideration two conditions:


1. The renovation provides added value to your house. This means that the house will be worth more

2. The renovation must be attached to your house. This means that you cannot take it with you when you move.


How does a building fund account work?


The money that the lender provides for a building fund account is placed in a separate account. You cannot simply withdraw money from this account. You must keep all receipts and invoices and submit them to the lender. This will then pay the bills. If you choose to pay the bills yourself, the bank will pay to you.


You can borrow a maximum of 100% of the value of the home. In case of a building fund account, you can borrow a maximum of 100% of the value after the renovation. A condition is that you can bear this amount on your income. The valuation report will include the values before and after the renovation. If you would like to invest in energy saving facilities, the maximum financing you can get is 106% of the market value after renovation.


The type of renovation that you want to carry out has an effect on the maximum mortgage.


• A fixed-value renovation: With a fixed-value renovation, you can have the costs fully financed in your mortgage. Starting point is the value after renovation. An example of a fixed-value renovation is the installation of a dormer.


• Modernization: In most cases these are personal taste related renovations. An example of this is the placement of a new kitchen or toilet. In such cases only 65% of the renovation costs are co-financed and you can then pay the remaining amount with your own resources.


What are the costs of buying a house?

When you buy a house in the Netherlands as your main residence, you need to count on some extra costs related to the mortgage. Some of these costs are deductible from your taxes, some not.


Deductible cost are:

  • Notary’s fee for the mortgage deed (hypotheekakte) and registration
  • Valuation report
  • National Mortgage Guarantee (NHG) fee
  • Fee for the mortgage consultancy
  • Interest payments on your mortgage (annual costs)
  • Costs for early repayment of a previous mortgage

Non-deductible costs:

  • Notary’s fee for the purchase deed
  • Notary’s fee for the transfer deed (Leveringsakte)
  • Transfer tax (overdrachtsbelasting)
  • The costs of your real estate agent (if applicable)
  • The costs of the technical inspection report
  • The bank guarantee

What does K.K. and V.O.N mean next to the price of the house?

K.K. (‘Kosten Koper’) means that all the costs related to purchasing a house will be paid by the buyer.
V.O.N. (‘Vrij op naam’) means that the purchasing costs are payable by the vendor. This mostly applies to newly build properties.


Can I make extra repayments?

If you have some savings and decide to make some extra repayments on top of your regular monthly payments, you can do it within certain limits. With most banks you can repay up to an additional 10% of the total loan per year without a penalty.


If you want to sell or refinance your house, you need to pay the remaining debt to the bank in one go. If you sell it, generally there is no penalty involved, however the bank will charge you with an administrative fee for handling the premature end of your mortgage. Also there is a notary fee involved, because he will have to remove the mortgage from the Land Registry. In case of refinancing (when you pay off your original mortgage with a cheaper one), there are also extra costs involved.


In general there are no extra costs involved when repaying your full mortgage in the following cases:

  • When your fixed interest period ends
  • In case of variable-interest mortgage
  • In case one of the mortgage holders dies

The repaying conditions of your mortgage are different at every bank, so the best option is to consult a mortgage advisor before you make your decision.


What kind of tax implications should I count on when taking out a mortgage?

Regarding taxes please note the followings:

  • You can deduct your mortgage interest payments from your taxes as long as you use the property as your main residence for a maximum of 30 years.
  • No capital gains tax: If the value of your house increases, it is tax-free. However, if you sell your house with an increased value and you buy another property to be used as your main residence, the Dutch tax department will expect you to invest the overvalue in the new property. If you decide not to use the extra money for the financing of your new home, then your new mortgage will be partially non-deductible.
  • If you decide to leave the country, but continue to own the property, your tax deductions will automatically disappear. As a non-resident taxpayer, you won’t be eligible for tax-deductible mortgage interest payments, therefore you should make sure that the rent amount you receive can cover both the costs and the interest.
  • The 30% ruling may increase your chances of getting an attractive mortgage deal.

Can I rent my purchased property?

Generally speaking no, you can’t, only in special circumstances for a limited period of time and only with the consent of your mortgage provider.


Mortgage Masters

Vermogenweg 25

3641 SR Mijdrecht


Office:          +31 297 257 608

Mobile:        +31 6 519 148 91

Whatsapp: +31 6 519 148 91

Email:           info@mortgagemasters.nl


Mortgage Masters is part of De Financiële Vis