Which mortgage type is right for me?

Taking out a mortgage might feel like a challenge, especially as an expat in the Netherlands. When buying a house in the Netherlands, there are two main types of Dutch mortgages to be considered: linear mortgage and annuity or repayment mortgage. But which type of mortgage is right for you?

Two Dutch mortgage types

Linear mortgage

With a linear mortgage, the amount of debt you repay every month is the same. On top of this, you also pay interest. At the beginning of the mortgage, debt and interest will be highest. As your debt reduces every month, repayments will go down over the loan period. A linear mortgage allows you to pay off your mortgage as quickly as possible. This can be advantageous if you want to reduce the risk of having debt after you have left the Netherlands or if you want to rent out your home in the future (mortgage lenders are more likely to approve rental if your mortgage is low compared to the value of the property).

Annuity or repayment mortgage

With an annuity mortgage, you make fixed monthly payments throughout the mortgage term (with the exception of interest rate fluctuations). Your monthly payment covers interest and loan repayment. In the early years, most of your monthly payment will go toward paying interest. Gradually, the interest part of your monthly payment is reduced in favor of paying off your loan. As only the interest is tax deductible, your net housing costs will increase during the mortgage term. You may opt for variable, fixed, or split rate annuity mortgages.

National Mortgage Guarantee

The National Mortgage Guarantee (Dutch: NHG) enables you to safely and responsibly borrow money to buy a house. NHG provides a safety net for you and your lender in case you run into payment problems due to circumstances beyond your control such as job loss, disability, divorce or death of your partner. The National Mortgage Guarantee is available for mortgages up to a certain value (€435.000 in 2024). 

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