Buying a home costs money. A lot of money. There are two things you can do:

→ You can start saving until you have the purchase price in your account. That requires a lot of
discipline to actually put money aside voluntarily every month. Besides, it might take you 30 years to
save up. Where will you live during all those years?
→ The other option is to borrow the money and use it to finance the purchase of the home. The
advantage is that you can move in immediately and start saving from that moment on. So you are
saving for something you have already bought!

Borrowing money to buy a home is called a mortgage.

It is important for you to realize that you become the owner of the property, and therefore it doesn’t
become the property of the person from whom you borrowed the money. You are responsible for
taking care of the property personally. Not only by maintaining it, but also by insuring it against the risk
of damage from fire or storm. Because even if the property becomes less valuable due to damage, for
example, the debt remains and you will have to pay it off sooner or later.

Why would someone lend you money to finance a home purchase? It’s simple: the lender makes a
profit. And that is exactly what banks do.

They encourage people with surplus money to deposit it into a savings account at the bank, for which
they pay a certain interest rate. Subsequently, they lend this deposited money to people who want to
buy a home. They charge these people a fee, the mortgage interest. This mortgage interest is higher
than the interest the bank pays on savings accounts. The difference between the savings interest and
the mortgage interest is the bank’s margin. This margin covers the bank’s costs and generates a
profit.

Young people, in particular, think that a home’s value can only increase annually. But that’s not the
case. A home’s value can also decrease (sharply). If a fire destroys your home, its value can even drop
to € 0.00.

However, that home is yours, not the bank’s. The loan you took out remains the same, regardless of
whether the property’s value increases or decreases.

Imagine, you buy a house for € 300,000.

After a few years, you get a job in another part of the Netherlands, forcing you to move. However, since
you bought the house, its value has decreased. For example, it might be worth only € 250,000, causing
you to sell the house for € 250,000. This allows you to repay most of the € 300,000 loan, but the bank
still wants the remaining € 50,000, meaning that you will have to withdraw that amount from your
savings account or borrow it again.

If, in the aforementioned example, your home is completely destroyed by fire, you no longer have a
home, but your debt to the bank remains. Fortunately, it’s possible to insure yourself against this. You
can read more about this in Chapter 19.

The bank wants the money lent back and tries to obtain maximum security by, among other things:

→ Not lending more money than the consumer can afford to pay in interest and repayments based on
their income (LTI=Loan To Income).
→ Not lending more money than the value of the home (Loan To Value).
→ Stipulating that if the loan is not repaid on time, the bank may sell the property and have first right to
recover its claim from the proceeds.
→ Prohibiting the owner from renting out the property. Tenants in the Netherlands enjoy a high degree
of protection against rent. A rented property fetches less when sold than an empty one. In such a
case, the lender would have less financial security if the property were to be forced to be sold. If you
borrowed the money and live in the property yourself, the bank can demand that you vacate the
property if you fail to repay the loan and then sell it empty.
→ Stipulating that both partners are jointly and severally liable. We will explain what this means later in
this booklet.

At its core, the National Mortgage Guarantee, NHG (Nationale Hypotheek Garantie, is an additional
security for the bank and therefore not a “guarantee” for the homeowner.

Let’s start at the beginning.

As a homebuyer, you can purchase the National Mortgage Guarantee (NHG) for a one-time premium of
0.4%. This will be possible in 2025 for homes up to € 450,000. If you implement energy-saving
measures, you can finance up to € 477,000 under the NHG.

The NHG only pays out when the homeowner can no longer afford their mortgage due to
unemployment, disability, death, or divorce. In such cases, the NHG takes over the debt from the bank.
This provides the bank with some additional security and is willing to charge a slightly lower interest
rate on mortgages with NHG. The discount you receive on the interest on the loan is often (much) more
than the premium you pay for the NHG. So, in that respect, it can be an attractive option for you.

After the NHG takes over your bank debt, you owe it to the NHG. The NHG wants you to simply pay off
the debt, so the debt is not waived! If necessary, the home may have to be sold, after which, under
certain circumstances, the remaining debt may be waived by the NHG.

This means that the NHG offers no security against the risk of a home’s value declining. It also means
that you, as the homeowner, can NOT simply sit back and expect the NHG to cover your mortgage
payments when you encounter payment problems.

However, in the case of the four events (unemployment, divorce, disability or death), the NHG does
work with those involved to figure out how the financial consequences can be dealt with, but the basic
principle is that the debt must simply be repaid.

It is important to distinguish between owning a property and having a debt with a bank.

You and your partner might buy the property together. You agree that you will both own 50% of the
property. But that doesn’t have to be the case. For cohabiting couples and those with prenuptial
agreements, the mortgage can simply be taken out in one name, provided that the income of that person is
sufficient to cover the new mortgage or the increase. Only in the case of a marriage in community of
property or when the income of the second person is required, will it be necessary to co-sign for the
mortgage.

So, living in your partner’s house doesn’t automatically mean you have to co-sign. If one partner’s income is
too low to cover the full required loan, the bank can require the other partner to co-sign. In that case, a
situation can arise where someone doesn’t become (co-)owner of the home, but can still be held liable for
the (full) mortgage debt.

Suppose the mortgage debt is € 300,000. After the mortgage is finalized, the relationship could end, with the
partner who owns the property disappearing. For example, because they know the debt is (much) higher
than the value of the property.

The remaining partner can’t do anything with the property because they don’t own it. At some point, the
bank will sell the property because the debt isn’t repaid. But if the property only generates € 200,000, that
leaves a remaining debt of € 100,000. The bank can then sue both partners for the full € 100,000. But one of
the partners is untraceable or receives welfare benefits. The other partner has an income (but doesn’t own
the home). The bank can then recover the full € 100,000 from this partner. In this example, this partner
would have to try to recover half from their ex-partner. The remaining partner would then have no home and
a debt of € 100,000!

Joint and several liability also applies when both partners, for example, own 50% of the property. In that
case, too, the bank can hold both partners liable for 100% of the debt. If one partner fails to pay this debt,
the other partner must recover the portion of the debt associated with the non-paying partner from them.

Society wants to prevent people from borrowing more than they can afford. Laws have been created to
prevent this. These laws prohibit banks from lending more money than is responsible. Two thresholds
apply:

→ The first threshold is that the bank may not lend more to the purchase of a home than the value of the
property at the time the loan is taken out. For this reason, the bank requires a property appraisal. In
the case of renovations, the bank considers the post-renovation value as stated in the appraisal
report.

→ The second threshold is the income of the person seeking the loan. The government has developed
general lending standards that apply to all consumers and are based on the spending habits of
people with different incomes, for example, on food, transportation, entertainment, clothing, etc.

With these two thresholds, the lower of the two is the maximum amount a bank may lend. So, if the
home is worth € 200,000 but you have a high income, easily allowing you to afford a € 300,000
mortgage, the bank will still not be allowed to finance more than € 200,000.

People with higher incomes will generally spend more than those with lower incomes. Knowing
someone’s income and their average monthly expenditure also tells you how much they have left over to
cover their housing costs. Banks are not permitted to grant loans larger than consumers can reasonably
afford.

The law prohibits banks from lending you more money to purchase a home than you can afford in
mortgage payments. One component of mortgage payments is the interest you must pay on the loan.

When you take out the loan, you and the bank agree on the interest you must pay on the loan. This
agreement can be for a short or longer period. See the next chapter for more information.

The interest rate you agree on affects your monthly payments. If you want to buy a house for € 300,000
and the interest rate is 2%, you pay € 500 in interest each month. But if the bank charges 4%, you have
to pay € 1,000 in interest each month.

If the income is the same in both situations, the lending standards system works in such a way that at an
interest rate of 2% the bank can lend you a higher amount than at an interest rate of 4%.

In reality, the statutory lending standards are not adjusted immediately after each interest rate change.
Changes in the interest rate are gradually reflected in the lending standards.

A fall in interest rates therefore means that people can borrow a higher amount from the bank to
purchase a home.

If many people who are looking for a home can borrow more money because interest rates are low, this
could possibly impact house prices. Normally, prices rise with increasing demand. This effect will be
stronger the greater the housing shortage. A situation where all banks charge a low mortgage interest
rate does not automatically mean that you can buy a house more easily, because the bank may be able
to lend you a higher amount than in a situation where the market interest rate on mortgages is higher.

When you take out a mortgage, you will be faced with two time blocks.

The first time block is the term. This term refers to the period from the moment you receive the money
to finance the home purchase until the loan is fully repaid. It’s common to take out a loan for a term of
30 years. This has a tax motive that we will discuss later. A shorter term might be an option if, for
example, you know you will be leaving the home in 20 years. However, with the same loan amount, a
shorter term does mean higher monthly interest and redemption costs. If you borrow € 300,000, the
monthly redemption over 30 years is € 833. But after 20 years, the redemption amount increases to
€ 1,250. The term therefore affects the amount of the monthly payments.

In addition, there’s a second (and more important) time block. This time block is called the fixed-rate
period. The fixed-rate period is the period you agree with the bank during which the interest rate will
remain unchanged.

For example, you could agree to a 30-year loan term, with an interest rate of 3.5% for the first 10 years.
After these 10 years, you will need to meet with the bank to renegotiate the interest rate. Suppose the
market interest rate at that time is 6%, then the bank will then offer you a new term of, for example, 10
years, in which you will pay 6% interest for the second term of 10 years.

Once that period is over (the 20th year), you will have to meet with the bank again. If the market
interest rate is 2% at that time, the bank will propose extending the loan for the third 10-year term at
2% interest.

As a client, you can choose a fixed-rate period yourself. For example, 5, 10, 15, 20, or even 30 years.

The interest rates that banks charge can vary significantly over the years.
An example of how bank interest rates can vary is shown in the table below, dated January 2023, for
a loan amounting to more than 90% of the property’s value:

1 year fixed 4.21% 6 years fixed 4.55% 11 years fixed 4.77% 20 years fixed 4.92%
2 years fixed 4.31% 7 years fixed 4.57% 12 years fixed 4.79% 25 years fixed 5.04%
3 years fixed 4.49% 8 years fixed 4.59% 13 years fixed 4.82% 30 years fixed 5.12%
4 years fixed 4.51% 9 years fixed 4.61% 14 years fixed 4.84%
5 years fixed 4.63% 10 years fixed 4.63% 15 years fixed 4.87%

(These percentages are just an example. Ask us about the current interest rate.)

The main question facing anyone taking out a mortgage is: which fixed-rate period do you choose?

It can be tempting to choose the shortest term and therefore the lowest interest rate, in this example 4.21%.
But if the interest rate rises to 6% a year later, your housing costs will increase significantly. The question is
whether you can still afford them then. And even if you can, you will probably be quite disappointed, because
you could have also chosen to fix the interest rate for 10 years at, say, 4.63%.

The problem is that no one knows what interest rates will do in the future. So, it’s a bit of a gamble. If you think
interest rates will rise in the coming years, it’s best to choose a long fixed-rate period. If you think interest rates
will fall in the future, it’s better to choose a short fixed-rate period.

Another approach is also possible. By choosing a fixed-rate term of 30 years now, you know exactly what your
housing costs will be. You don’t run the risk of suddenly having to pay more in the future. You might conclude
after 30 years that, given what you knew at the time, you paid too much, but that you have had the security of
fixed housing costs throughout all those years.

As we discussed before, you agreed on a fixed-rate period with a bank. The basic principle is that both
you and the bank are bound to the agreed-upon interest rate for that period, as long as the loan remains
in effect.

Now, imagine you take out a mortgage in 2025 and agree on a 4% interest rate with the bank for a 5-
year term. In 2029, there is still a year to go before you meet with the bank again to discuss a new fixedrate
period.

But for whatever reason, interest rates will suddenly be much lower in 2029. If you were able to agree
on a new fixed-rate period at that time, the interest rate for a 20-year fixed-rate period would be, for
example, 2.5%. Now you could wait until 2030. But there is a chance interest rates will have increased
again by then.

Every bank allows you to renegotiate your mortgage agreement. This means that in 2029, you agree
with the bank on a new fixed-rate period for, say, 10 years at 2.5% in this example. The bank is then
entitled to compensation for the difference between the interest it would have received that year for the
agreed-upon interest rate (4%) and the interest it actually receives (2.5%).

For a home worth € 300,000, the bank’s loss amounts to 1.5% of € 300,000, which is € 4,500. You must
pay this amount to the bank at that time. Early redemption compensation, also known as default interest,
is tax-deductible.

This is not an actual loss for you as the consumer. If you had simply left the contract in place, you would
still have had to pay this, but by doing so, you can fix your interest rate for a longer period at a time
when market rates are low.

When you buy a home, you have to pay a one-time tax on the purchase price. This tax is a fee
for the public amenities available in the municipality where the home is located. The rates are:

→ If you are buying a home for the first time and are going to live in it yourself and you are
under 35 years old, and the purchase price of the home is no more than € 525,000: 0%.
→ If you do not meet the previous condition but you are buying a home to live in yourself: 2%.
→ If you buy a home not to live in it yourself (rent it out), the rate is 10.4%. You must indicate on
a tax form at the civil-law notary whether you will live in the home yourself and/or whether you
qualify for the first-time buyer exemption.

When you work, you receive a salary. You must pay income tax on this salary. In 2025, this amounts to:
Up to an annual income of € 38,441: 35.82%
For the portion above from € 38,441 to € 76,817: 37.48%
From € 76,817: 49.50%

Under certain conditions, you may deduct the interest you pay on a mortgage from your taxable income.
Let’s take another look at the € 300,000 house with an interest rate of 3.5% and someone with an annual
income of € 50,000.

Income tax without own house
Income: €50,000
Deduction related to mortgage interest: 0
Taxable income: €50,000
Rate up to income €38,441: 35.82%
Payable up to €38,441: On income up to €38,441 = €13,769
Higher than €38,441 up to €76,817:
€50,000 – €38,441 = €11,559
37.48% of €11,559 = €4,332

Total income tax payable: €13,769 + €4,332 = €18,101

Income tax with own house
Income: €50,000
Deduction related to mortgage interest: €12,000
Taxable income: €38,000
Rate up to income €38,441: 35.82%
Payable up to €38,441: On income €38,000 against 35.82% = €13,611
Higher than €38,441 up to €76,817: 0
Total income tax payable: €13,611

The tax benefit in this example is therefore € 18,101 minus € 13,611 = € 4,490.
That is € 141 per month! This example doesn’t take into account a special tax levy you face as a homeowner:
the notional rental value. We will discuss this in Chapter 15.
We indicated that the interest is deductible under certain conditions, including:
→ You must (go) live in the home yourself.
→ In addition to the interest, you must repay the loan in equal monthly installments over a period of 30 years.
→ At the civil-law notary, you indicate on a tax form whether you will live in the home yourself and/or whether
you can make use of the first-time buyer exemption.

It is common for someone who needs a mortgage to finance their home to go to an advisor for advice.

These advisors pass their fees on to the client requesting advice. The advisor’s fee ranges from € 2,500 to
€ 4,000 and can be deducted (once only) from your taxable income.

Next, the house needs to be appraised by the bank, and the civil-law notary needs to draw up the
mortgage deed, which often costs around € 1,000. These costs can also be deducted from your income
(once only) in the year in which they are incurred.

Basically, you could say that the tax authorities cover more than a third of these costs.

The costs you are allowed to deduct from your income to finance the home you will personally be living in
include:
→ consulting fees;
→ appraisal costs;
→ any default interest;
→ NHG costs.

What the tax authorities give with one hand (mortgage interest relief), they partially take back
with the other (notional rental value). We can’t sugarcoat it. You will have to pay tax on the
property’s WOZ value.

If the WOZ value of a property is € 300,000, you must add 0.35% of this to your income in 2025,
which amounts to € 1,050. This means that you will have to pay income tax on this amount. For
example, at a rate of 37.48% = € 393.54, that amounts to € 32.80 per month.

So when processing your loan for tax purposes, you will be faced with an item that you can
deduct and an item that you must add.

A less pleasant topic: what happens when your relationship ends?

Let’s start with the main rule.

→ Suppose the total debt is € 300,000, then in principle each partner bears 50% of the debt. So,
€ 150,000 for each. But be careful. We saw earlier (Chapter 6) that both partners can be held
liable for 100% of the debt by the financier.

→ Now assume that the home is 50% owned by each partner. Suppose that at the time of the
divorce/end of the relationship, the value of the home, according to the mortgage, is also
€ 300,000. Then, on one hand, there is a debt of € 150,000 and on the other, an asset of
€ 150,000.

In this clear numerical example, it seems obvious that the partner who continues to live in the
home gives € 150,000 to the partner who leaves, thus obtaining full ownership of the home, and
that the partner who leaves uses this € 150,000 to pay off their debt. However, if the home has
increased in value, the remaining partner will have to pay more for the share of the home that they
take over from the departing partner, and the departing partner will therefore have money “left
over”.

As long as all costs of the house are paid equally by both partners, it is also correct that the
proceeds of the house are divided equally by both parties..

This changes when one partner invests (significantly) more in the home than the other, or, for
example, finances the costs of a renovation from their own assets. In that case, it’s reasonable that,
when determining the value of the home in connection with a divorce, the portion contributed by
one partner should first be allocated to them and only then be divided 50/50.

When it comes to financing, you will be interacting with various people, each handling some of the tasks
required to purchase and finance a home. We have listed the key people involved, in chronological order
of the people you will be dealing with.

1 Mortgage Advisor
Before you make an offer on a property, it is
recommended that you consult with a mortgage
advisor. They can give you a general idea of what a
reasonable purchase price is for you, from a
financial perspective. This prevents you from
making an offer you can’t fulfill because you can’t
borrow the necessary amount.

2 Real estate agent
A real estate agent can act for either the seller or
the buyer of a property. A real estate agent may
not serve both parties simultaneously.

3 Energy expert
When you sell your home, you are required to have
an energy label for your home. This label can be
issued by a certified energy expert who will
conduct an inspection in and around the home.

4 Appraiser
If you already own a home and want to take out an
(additional) mortgage for that home, the bank will
often ask you to have your home appraised by an
independent expert.

5 Lender
Most people take out a loan from a bank to finance
their home. At the bank, they deal with
“underwriters” who assess whether they are
eligible to lend money and, if so, how much. They
consider factors such as the individual’s income
and the value of their home.

6 Civil-law notary
A civil-law notary is appointed by the government.
Agreements, such as those concerning the transfer
of a property or the taking out of a loan, can be
signed by the parties in the presence of a civil-law
notary. The presence of the civil-law notary then
provides proof that the parties have indeed agreed
to the relevant agreements. The civil-law notary
also ensures that specific agreements, such as the
mortgage, are recorded in a public register to
ensure that third parties are aware that the
property is mortgaged

Buying a home is the ideal time to consider making it more energy-efficient. Major renovations are also
a good opportunity to address “sustainability” at the same time.

There are several reasons for doing this:

→ The (sales) value of your home increases as the home becomes more energy efficient.
→ You limit your monthly energy costs.
→ The living environment in your home becomes more pleasant.
→ You contribute to achieving the climate goals.

There are currently many options available to make your home more sustainable. This includes
attractive mortgage options, as well as subsidies from the government, provincial government, and
certain municipalities.

When purchasing or renovating a home, take some time to think about making it more sustainable.

As soon as you become the owner of the home, the risk of the home being damaged also passes to you.

For example, a fire could break out, or a heavy storm could damage the roof of your home. Damage will
decrease the value of your home. However, the debt you incurred to purchase the home remains, even if
the property has lost value due to the damage.

The costs of repairing the damage can be significant. You can prevent financial problems by ensuring
you have good home insurance that is effective as soon as you own the property. Several insurance
companies offer home insurance. The terms of these insurance policies can vary. For example, you
might be asked to determine the deductible you are willing to bear in the event of damage, or, in the
case of major damage, how long you will be reimbursed for the costs of living elsewhere if you can’t live
in your home while it is being repaired.

The right insurance policy depends on the property (whether it has a thatched roof or not) and your
needs and preferences. Therefore, seek proper advice in this area as well.

When you get married, the law automatically attaches several legal consequences. These include parental
authority over the children, the creation of joint assets, and the rights of one spouse to the assets after the
other’s death.

Of course, you can also live together without getting married, but especially when you are buying a home
together, it is wise to draw up a cohabitation contract, in which you agree on how matters should be arranged in
the event of certain events.

In fact, a cohabitation contract allows you to arrange virtually all the legal matters for people getting married.
The difference is that you have to take the initiative yourself. Furthermore, a cohabitation contract allows you to
tailor the arrangements to your specific needs.

A cohabitation contract is drawn up by a civil-law notary and is also valid against third parties.

Important matters that you can arrange in a cohabitation contract include:
→ If you are registered at the same address, you automatically become each other’s tax partners. This can be
attractive if the income difference between the partners is large, due to the mortgage interest deduction.
→ With regard to the mortgage, you can make agreements about the following:
o Who pays the interest and redemption on the mortgage;
o Who benefits from any increase in the property’s value if it is sold;
o Who should pay which part of any residual mortgage debt.
→ If one or both partners participate in a pension plan, you can report this to the pension provider after
concluding the cohabitation contract. They will then agree that, if the pension participant dies, a survivor’s
pension will be paid to the surviving partner.
→ A cohabitation contract is not the same as a will, but it does, however, specify your joint assets. If one of the
partners dies, the surviving partner will inherit these joint possessions.

To ensure that you inherit all of each other’s personal property, each of you must make a will.

When you die without a will, the law governs how your estate is to be distributed. The legislator therefore
determines who receives what portion of your assets from the inheritance.

Within certain limits, you can use a will to ensure that your inheritance is distributed differently than under the
statutory provisions. For a will, you need to consult a civil-law notary.

Topics that you can take care of in a will include:
→ Who do you want to appoint as heirs (for example, also charities)?
→ Which of the heirs receives which part of the estate?
→ Who will care for the minor children (guardianship scheme) and what provision should be made for the
costs of this guardianship?
→ What should happen to the assets you leave to your children if the relationship between your child and
their partner ends?
→ Preventing the estate from becoming nil because the surviving spouse has to be admitted to a nursing
home and has to finance the costs themselves.
→ Who will arrange the settlement of the inheritance after death?
→ Agreements that ensure that the inheritance tax for the surviving relatives is lower than without these
agreements.

If you are living together unmarried and are planning to buy a home together, it is wise to have both a
cohabitation agreement and a will drawn up by a civil-law notary. It is best to do this before you buy the home
and take out a mortgage. Didn’t get around to it? No problem. But do it now!

A mortgage is nothing more or less than a (large) sum of money you borrow for a very long period of time.
You must repay the loan in all cases, including interest on the amount borrowed.
Together with the advisor and the bank, you assess whether you and your partner will be able to afford the
mortgage, both now and in the future. Whether you can afford it now is easy to determine, but whether you
can afford it in the future is less certain. After all, changes in your life may occur that make it harder or
impossible for you to continue to bear the mortgage costs. Here are some examples:

→ One of the partners might become unemployed, for example, because the company goes bankrupt. Can a
new job be found with at least the same salary?
→ You can become ill for a long time.
→ You can become disabled due to a traffic accident. If you are at fault, you will face a significant drop in
income.
→ If children are born into the family, one or both partners may need to start working fewer hours.
→ The relationship could end. This would not only mean a loss of income, but also that one partner would
likely leave the home and have to look for another, which would also have housing costs.
→ Premature death of one of the partners.
→ Perhaps one or both partners will retire before the debt is fully repaid. This pension may be (much) lower
than the income they earned. If mortgage payments remain the same, it is questionable whether they can
still be easily covered with the lower pension.

It’s important to be realistic about the possibility of bad luck. By taking this into account early on, you are able
to mitigate the financial consequences of these risks.

Does it make a difference whether you want a bank loan to buy an existing home or a loan to have one built?
Yes, it makes a big difference.

In most cases where someone wants to build a home, they already own one. A loan has often already been
taken out to purchase this home. If you want to remain in this home until the new one is finished, you will
temporarily face double costs, namely:
→ The mortgage costs of the home in which you are living.
→ The costs of the loan you take out to pay the contractor who will be building the new home.

The process works as follows: You agree with the bank to grant you a loan for the total amount you estimate
you will need to cover the costs of your new home. The bank lends you this amount under the condition that,
once the new home is ready, you move in and sell your old home, paying off the mortgage on it. The bank
deposits the full amount for the construction of the new home into a separate account (home construction
account), from which you can pay the invoices the contractor sends you during construction. The bank pays
interest on the amount in this account, and you pay interest on the amount you withdraw to pay the contractor.

Financing a newly built house comes with certain uncertainties that you don’t have when buying an existing
home. These include:
→ Once the new home is “finished,” you need to sell your “old” home. How long does that take, and is the
selling price still roughly what you had in mind when you started the new-build?
→ The cost of materials and labor can rise sharply in a short period of time. Who bears the risk for these cost
increases? The contractor’s risk, or yours as the client?
→ The contractor can go bankrupt during the construction process. What happens then with the completion of
the house? And who will pay if the bankrupt contractor made mistakes during construction?
→ If “additional work” arises during construction, can it still be financed? Financing a home you’re having built
or are planning to build yourself is possible, but it is quite different from financing an existing home.

At the end of 2024, the average purchase price of a home in the Netherlands was around € 500,000. Unless you have a very
well-paid job, it is probably not possible to buy a home on a single income.

Does this mean that finding a life partner who can support you with a dual income mortgage is the only option?

No, there are several options. Talking to a good mortgage advisor can help you explore whether and, if so, which other options
might be available to you. These might include, for example, specially subsidized loans for young first-time buyers or potential
guarantees or gifts from family members such as parents or grandparents.

A relatively new development is that two or more people who aren’t romantically involved decide to buy a home together.
These could be brothers, friends, or colleagues, for example.

The core idea here is that you add up the incomes of those who will be living together. That total income, combined with the
value of the home you want to buy, determines the maximum amount the bank will lend you.

Especially when three or four people buy a home together, their combined income will often be sufficient to purchase a
property in the higher price range. The supply of these more expensive homes is generally greater than homes in the lower
price range.

This might sound like a good solution if you’re single. However, we strongly advise you to seek expert advice when making
such a decision, as it is wise to arrange a few things thoroughly with your co-buyers right away. Below are a few examples:
→ What happens if one of your co-buyers wants to move after a few years and wants to receive their share of the property’s
value?
→ What happens if one of the co-buyers starts a romantic relationship? Is that new partner allowed to move into the property?
→ How do you handle the unexpected death of one of the co-buyers? How are the deceased’s heirs then “settled”?
→ What is the arrangement if one of the co-buyers contributes more or less to the costs of maintaining the home?

There are many more questions you should carefully consider before taking this step. There is an answer to every question. It
is important to ensure that the answer, and the resulting decision, align with your situation and needs. We are more than
happy to give you sound advise!

The “yippee gift” is no longer available. However, parents are still allowed to give an amount in 2025. In 2025,
parents are allowed to give each of their children € 6,713. The children do not have to pay tax on this amount.

In addition, a parent may make a one-time larger gift to a child. However, this exemption only applies if the
recipient or their partner is between 18 and 40 years old. For 2025, the exemption for this one-time gift is
€ 32,195. The child is free to decide how this gift amount is spent. It can also be used to finance part of the
purchase/maintenance of the home.

Gifts exceeding the exemption are subject to tax. Gifts up to € 154,197 are subject to 10% tax. Any excess
amount is subject to a 20% tax rate.

Some expect politicians to significantly increase inheritance tax in the coming years. Election manifestos
feature tax rates of 30% and 40% for inheritances exceeding € 1 million.

For example, parents with sufficient assets during their lifetime might make a large gift, with the children now
paying the 10% gift tax. This gift can also be made on paper, through a civil-law notary, so the parents don’t
have to pay the gifted money directly to the child.

For more information about such a process, it is recommended to seek comprehensive advice from a civil-law
notary or tax specialist, for example. If you are interested, we are more than happy to connect you with
specialists our firm has had positive experiences with.

At the end of this publication “Mortgage Step by Step” we would like to draw your attention to something important.

There currently is a significant housing shortage. We certainly understand everyone’s desire to be able to buy their own home.
We also understand that you might want to make certain things look a bit better than they actually are to try and convince the
bank to grant you the loan you need.

This “making things look better” approach can go way too far. For example, by concealing debts you owe or falsifying
documents you need to provide to the bank, such as an employer’s statement or bank statements.

The bank could discover this before your application has been decided. In all likelihood, in that case the bank will not grant the
loan, but that will not be the end of it. The bank could also discover it after the loan has been granted. In that case, too, the bank
will likely take action. The negative consequences for you and your partner could be enormous. You should take into account
that the bank takes the following measures :
→ The bank will terminate the relationship with you and your partner. Not just for the mortgage but for all services.
→ If the loan has already been granted, the bank will cancel the mortgage agreement. This means you will then have to repay
the loan in full at once.
→ The bank will have the right to charge you fees for repaying the loan earlier than agreed.
→ In the event of fraud, the bank can register you and your partner in a register consulted by all banks and insurance
companies. This registration can last for eight years. During this registration period, you may find that you cannot take out a
new mortgage or insurance policy, or that you may be charged extra fees.
→ The bank can also file a police report, which could result in criminal prosecution.

These are all measures that have enormous consequences for you and your partner. Therefore, our urgent advice: stay away
from mortgage fraud.

If you are unsure about what the bank means with certain questions throughout the mortgage process, don’t just guess and
answer “randomly.” We are your advisor, and we are here to represent your interests throughout the home financing process.
So, if you have any questions, don’t hesitate asking us!