Are you going to buy a house in the near future and do you want to include the income from rental property or from an investment property for your mortgage? It is possible to include the rental income when determining the test income. In this way, this income increases the borrowing capacity. In this article we explain how including the rental income for the mortgage works and you can see which lenders are best for you.
Include rental income when applying for a mortgage
The arrival of the buy-to-let mortgage has made investing in real estate accessible to a wider public. More and more people are therefore asking whether the rental income can also be included in the mortgage application for financing their own home. You can add part of the rental income in box 3 to the test income. You can include about 80% of the rental income for financing. This percentage differs per lender. The reason why 100% cannot be calculated is that the operating costs of rented property are taken into account.
When you rent out your first home or have built up a nice real estate portfolio, you may use the rental income to finance a new owner-occupied home that you will live in yourself. The rental income improves your options, which is great of course. The percentage that you can include in rental income for the mortgage differs per lender. In addition, the rental income is also reduced by the mortgage costs of a possible real estate financing. Every provider of home mortgages looks at this differently and has different conditions.
Include the fine print with rental income
There are a number of rules that lenders apply for including rental income when applying for a mortgage. Some mortgage providers have stricter rules and others are quite flexible in including rental income. Therefore, get good advice.
- Demonstrate with proof of actually receiving the rental income. There are lenders, where you have to demonstrate the rental income of a few months. On the other hand, there are also stricter providers who want to see revenues from two years back
- Provide an overview of the mortgage payments. Certain lenders place the full mortgage costs in box 3 with an annuity charge and a key interest rate of 5%. Others rate the loan more favorably by calculating the loan based on the actual costs
- An open door, we’ll mention it anyway: income from illegal rental cannot be included. It is therefore important that the owner-occupied home is rented out with the agreement of the mortgage lender
- Your rented home falls into box 3 (investing and saving)
- The rental income may not come from holiday rentals or through Airbnb
- Room rental is not accepted by every lender
- It is often important to be able to invest your own money
| Mortgage lender | Including rental income for home mortgage |
|---|---|
| ABN-AMRO |  |
| Aegon | |
| Allianz | |
| Argenta | |
| ASN Bank | |
| asr | |
| Attens | |
| bijBouwe | |
| BLG Wonen | |
| Centraal Beheer | |
| Clarian Wonen | |
| Florius | |
| HollandWoont | |
| Hypotrust | |
| ING | |
| IQWOON | |
| LLoyds Bank | |
| Lot Hypotheken | |
| Merius | |
| Moneyou | |
| Munt Hypotheken | |
| Nationale-Nederlanden | |
| NIBC Direct | |
| Obvion | |
| Rabobank | |
| REAAL | |
| Robuust | |
| Syntrus achmea | |
| Tellius | |
| Triodos Bank | |
| Tulp hypotheken | |
| Venn hypotheken | |
| Vista hypotheken | |
| Woonfonds | |
| Woonnu | |
Increase first mortgage
Do you want to buy an investment property or are you considering a second home? It is also an option to finance this in a different way. At Bliss we help our customers with withdrawing the equity to purchase real estate . If you have equity on your owner-occupied home, you can choose to increase the mortgage or take out a second mortgage. If you increase the mortgage, you no longer have to pay off the mortgage within 30 years. The so-called repayment requirement does not apply to this. In addition, many lenders accept the option of partially financing the loan with a interest-only mortgage. That means considerably lower monthly costs, since you save less in the bricks of your own home.
Bliss is happy to help you
At Bliss we help with advice and mediation regarding the purchase and financing of your own home as well as investment properties. We can offer you complete guidance in utilizing the equity and also financing your first and next rental property. Do you want to buy a new house to live in yourself and keep your current house for rent? In this situation we can also help you further.
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