25 Essential Dutch Mortgage Terms Every Expat Must Know

By Walter Nieuwendijk, Financial Advisor at Financieel Fit Het Gooi

Buying a home in the Netherlands as an expat can feel overwhelming — especially when you’re faced with unfamiliar mortgage jargon. To help you navigate the process confidently, I’ve compiled a list of 25 essential Dutch mortgage terms you’ll encounter along the way.

Mastering these concepts will not only make your mortgage application smoother but also help you avoid costly mistakes and make smarter decisions.

The basics of Dutch mortgages

1. Mortgage (Hypothecaire lening)

A long-term loan secured by your home, repaid monthly with interest.

2. Loan-to-Value (LTV)

The percentage of your home’s value that you finance with a mortgage. Lower LTV = less risk = better interest rates.

3. National Mortgage Guarantee (NHG)

A government-backed safety net for mortgages up to €450,000 (2025). It lowers your risk — and often your interest rate.

Official source: Government of the Netherlands – NHG

Affordability and eligibility

4. Toetsrente (Qualifying Interest Rate)

A standardized interest rate lenders use to calculate how much you can borrow, regardless of your actual mortgage rate.

5. Employer’s Statement (Werkgeversverklaring)

A required document from your employer confirming salary, contract type, and job details.

6. Credit Registry (BKR)

The Dutch national credit registry showing your loans and payment history. Negative entries reduce your borrowing power.

Property and valuation

7. Property Valuation (Taxatie)

A certified appraisal of your future home. It determines the maximum loan amount a lender will approve.

Mortgage types

8. Interest-Only Mortgage (Aflossingsvrije hypotheek)

You only pay interest — not principal. Risky and strictly limited by banks.

9. Annuity Mortgage (Annuïteitenhypotheek)

Fixed monthly payments where interest decreases and repayment increases over time.

10. Linear Mortgage (Lineaire hypotheek)

Monthly payments start high and decrease steadily, as principal stays fixed and interest drops.

Mortgage-related fees

11. Advisory Fees (Advieskosten)

Your mortgage advisor’s fee. Often tax-deductible in the Netherlands.

12. Commitment Fee (Bereidstellingsprovisie)

A fee for extending your mortgage offer when the process takes longer than expected.

13. Prepayment Penalty (Boeterente)

Charged when you repay or refinance early during a fixed-rate period — especially if rates have dropped.

14. Penalty-Free Repayment (Boetevrije aflossing)

Most lenders allow up to 10% annual repayment of your mortgage without penalty.

Equity, transitions, and taxes

15. Equity / Home Equity (Overwaarde)

The difference between your home’s value and remaining mortgage. Often used when moving.

16. Bridge Loan (Overbruggingshypotheek)

Helps you buy a new home before selling your old one, using the equity as collateral.

17. Eigenwoningforfait (Imputed Rental Value)

A small percentage of your home’s value is added to your taxable income under Dutch tax law.

Costs and sustainability

18. Buyer’s Costs (Kosten koper – k.k.)

Covers transfer tax, notary fees, and registration — typically 5–6% of the purchase price.

19. Energy Label (Energielabel)

Rates energy efficiency (A+++ to G). A better label may unlock extra borrowing or discounts.

Official source: Government of the Netherlands – Energy Label

20. Building Fund (Bouwdepot)

Part of your mortgage set aside for renovations, released as invoices are submitted.

Guarantees and co-buying

21. Bank Guarantee (Bankgarantie)

A 10% security deposit guaranteed by your bank to fulfill your purchase contract obligations.

22. Cohabitation Agreement (Samenlevingscontract)

Legal agreement for unmarried buyers defining ownership, contributions, and exit scenarios.

Interest and repayment terms

23. Fixed-Rate Period (Rentevaste periode)

How long your interest rate remains unchanged — often 5, 10, or 20 years.

24. Interest Rate Averaging (Rentemiddeling)

A method to lower your rate mid-term by averaging old and current rates, without refinancing.

Support for first-time buyers

25. Starter Loan (Starterslening)

A secondary loan from your municipality to bridge the gap between your borrowing limit and the purchase price. Repayment is often deferred.

Final thoughts: knowledge reduces risk

Whether you’re buying your first home in the Netherlands or relocating internally, knowing these 25 terms will give you a clear advantage. You’ll be better prepared, ask smarter questions, and confidently compare mortgage offers.

Ready to take the next step?

👉 Visit www.gecertificeerdkoper.nl
👉 Book a free session with a certified advisor
👉 Learn how to become a Gecertificeerd Koper — and gain a real edge on the Dutch housing market