Mortgages in the Netherlands
Most mortgages that are available in the Netherlands are for a duration of thirty years. I would like to recommend to get advice from a mortgage broker instead of a bank. A mortgage broker represents several banks and can recommend you the mortgage which suits you best.
Can I get a mortgage?
It might be more difficult for self-employed expats to get a mortgage. Banks want to make sure that you can repay your loan and see self-employment as a higher risk. The following is required to be able to get a mortgage:
- You are financially independent and employed.
- You lived in the Netherlands for 5 years.
- You might need to pay a deposit and the mortgage might be limited to 90% or less of the total property value.
- For non-EU passport holders, you need to provide that your residency permit can be extended.
Types of Mortgages
The amount that you repay with a linear mortgage is the same every month. You will also repay interest on top of your debt. At the beginning of your mortgage, you will pay more interest (because your loan is higher). The longer you have the mortgage the less you will pay on a monthly basis. With a linear mortgage, you pay less debt compared to the annuities mortgage and you pay off your mortgage as quickly as possible.
When you start paying off your annuity mortgages, the monthly payments are mostly interest and a small part of the loan. As you pay off your debt, the amount of interest you pay also decreases. The balance reverses when you've been paying for some time meaning the interest you pay is lower and the repayment of your loan is higher. In the early days, the annuity mortgage has a lower monthly payment compared to the linear mortgage.
Mortgages suitable for expats
There are also other types of mortgages like the interest-only mortgage. These are less common since they often ask you to invest a lot of your own money. Besides that, the risk can be higher because of the changing housing prices.
I hope this article gave you some insights into the mortgages in the Netherlands. Again, I would like to advise you to get a mortgage broker.