We are increasingly helping Dutch people abroad with the financing of a property in the Netherlands. We regularly receive requests from Dutch expats abroad to help with a mortgage for a home in the Netherlands. Do you meet the requirements and do you have the right qualifications? Then there are certainly opportunities, especially if you live in Europe. On this page we discuss a number of common situations.
1. You will be coming back to the Netherlands soon
It is possible that you want to buy a house in the Netherlands, but currently still live and work abroad. Can you get a mortgage? The answer is yes, but subject to conditions depending on your personal situation.
It is possible that you now live abroad and will soon be moving back to the Netherlands to work here. In that case, you can do two things:
- You can start renting for a while and then apply for a mortgage with your new Dutch income under normal rules.
- It is also possible to apply for a Dutch mortgage from abroad under a number of conditions. In that case, it is important that your employer declares from which date you will return to the Netherlands and what your income will be. It is also important that you have a permanent contract and that there is no longer a probationary period. In addition, the country where you currently live will be considered.
It is important that you now have income in euros or at least live in Europe. And if you live outside Europe, you work for a large, international organization. Always consult with your mortgage advisor, but in that situation if you are going to work back in the Netherlands in the short term, you can often already apply for a mortgage.
Are you currently an expat and will you return to the Netherlands in the short term? And can you demonstrate that you will enjoy income again in the Netherlands? Then there are opportunities to obtain a mortgage for a home in the Netherlands before you return. For this it is important that your employer declares in writing when you will start in the Netherlands again and what the level of your new income will be.
Based on your personal situation, it is possible that you fall under the regular income test. To determine the maximal mortgage, mortgage interest deduction is taken into account. It is also relevant that you can demonstrate that there are sufficient own resources to be able to temporarily pay the double housing costs.
2. An extra house if you regularly stay in the Netherlands (pied-à-terre)
You may also live and work abroad. And want to keep doing that. But that you also want to buy a house in the Netherlands. An additional house. To live in if you stay here for a while. Such a type of home is called a pied-à-terre. Financing is also possible for this type of home. A buying a second home and financing is different than usual.
There are a number of conditions for this. First of all, you and any co-applicant must have Dutch nationality. In addition, it is of course important that there is enough income. After all, your main residence is abroad where you currently live and work. And want to buy an extra house in the Netherlands. You must have enough income to be able to continue to pay for both those homes.
A lower limit of at least 60,000 euros in annual income often applies, but of course the exact housing costs abroad are also taken into account. If you have already spent more than 20% of your income on housing costs on your current house, it is often not possible to also purchase a house in the Netherlands.
Your employer may also pay part of your housing costs abroad. If you receive such compensation, you may include it in the calculation of the expenses. In addition, it is important that if you buy a home in the Netherlands, that it is really a home for you to live in while you are here and not for rental. Nor may it be a holiday home or holiday home.
Finally, you also need to have some money of your own to be able to invest. The maximum mortgage for such a pied-à-terre home is 85 percent of the home’s value. You must therefore be able to invest at least 15 percent yourself before the purchase. Often there are also some additional requirements for the mortgage, such as a shorter term of the mortgage.
Most of the requests we receive from expats and Dutch people abroad have this objective. You are looking for a house in the Netherlands that you want to live in yourself when you are here. You are regularly in the Netherlands to visit friends and family, for example. The house is not rented to third parties.
As an expatriate, it is important that you structurally generate sufficient income to be able to continue to pay the housing costs in your country of residence and in the Netherlands. In this situation, according to Dutch standards, you can spend approximately 20% to 22% of your gross income on total housing costs. Does your rent in the country of residence already amount to 20% or more of your gross income? Then a mortgage is no longer possible in the Netherlands. Does your employer contribute to housing costs on a structural basis? Then you may include this when determining the borrowing capacity.
Also keep in mind that the mortgage for expats usually does not have to be paid off in 30 years, but rather in 20 years. The monthly costs are therefore higher than with a mortgage with a standard repayment term of 30 years. A handy rule of thumb at the current low interest rates: per € 100,000 loan you have approximately € 500 in monthly payments (interest + repayment).
Important rules for buying an extra house by expats (pied-à-terre):
- Nationality: at least 1 of the applicants has a Dutch passport. Any other applicant has an EU passport or residence permit.
- Income limit: Minimum gross annual income of €60,000 of the main applicant.
- Now living in Europe (outside Europe possibilities are limited*).
- Rental is not allowed (see below).
- Recreation and holiday park homes cannot be financed.
- Only income from employment is applicable. Income from your own company outside the Netherlands cannot be included.
- Maximum loan is 85% compared to the market value of the home.
*Possibility when staying outside Europe
There are limited options for getting a mortgage for a pied-à-terre if you live outside of Europe. If you live in a country that is classified as a risk country, you can usually not help. Keep in mind that lenders can change their underwriting policies (and the list of risk countries) at any time, including during the process. There are options if:
- Your income is in euros (not only the payment but also in the employment contract).
- There is a commitment from the employer that you will return to the Netherlands within 6 months (in writing: hard date + income from that moment).
- You have an address in the Netherlands where you and your co-applicant receive mail from a bank and/or municipal institution. You therefore live in the Netherlands and have an employer in another country. For example, because you travel back and forth a lot and/or can work online. You declare this in writing. It is not a requirement that you are registered and/or liable for tax in the Netherlands.
3. You want to buy a property in the Netherlands to let (real estate investment)
Do you want to invest in a house or apartment to rent out? Then there are options to get a specific mortgage for this. The name of such real estate financing is the buy-to-let mortgage. Keep in mind that you can usually not exceed 70-80% of the market value in rented condition to borrow. The market value in rented condition is determined by an independent appraiser. The market value in rented condition is often between 70-100% of the purchase price. If the property is valued low, only a loan of, for example, 56% of the purchase price (80% of 70% of the purchase price) is possible. In addition, the mortgage rates for these loans are 1 to 2% higher than regular mortgage rates.
Because the rental flow is in euros, you have no/less currency risk. When assessing the mortgage for buying a house to rent out, it is mainly checked whether this rental flow is high enough to meet the mortgage costs. Less attention is paid to income from work. This is only possible for investors who own about 5 apartments for rent or who have a serious plan (with numerical substantiation) to build this up in the coming years. You can be characterized as a professional real estate investor in this situation. Every lender has different requirements to qualify as a professional.
Mortgage interest deduction for expats
It is possible that as an expat you can use a tax rebate on paid interest in your own country of residence. You must consult the local tax authority for this. This is hardly taken into account when calculating the maximum borrowing capacity in the Netherlands.
Mortgage for a house abroad
A buy a house in Spain, France or Curaçao? It is also possible that you want to buy a house abroad. It is not possible to apply for a Dutch mortgage from a regular lender. If you already have a mortgage in the Netherlands, you can investigate the possibility of increasing that mortgage. If there is a lot of equity in the house and you have enough income, you can sometimes increase your mortgage and use the released equity to invest in a house abroad.
Are you curious about what is possible or useful in your situation? Would you like to know whether you are eligible for a mortgage in the Netherlands while living abroad? Make an appointment with one of our mortgage advisers.