What is the National Mortgage Guarantee (NHG) norm?
The National Mortgage Guarantee is a Dutch mortgage scheme that can help you get a home loan against a very low interest rate if you buy a property with a maximum worth of €265,000. The scheme takes a look at your income and makes sure that it matches with your wishes and needs in terms of a mortgage.
The guarantee provides a safety net for both the lender and mortgage provider for when the mortgage can no longer be repaid. The NHG specifies four situations where you as a lender of a NHG-backed mortgage can make use of this arrangement:
- You lose your job
- Your relationship ends
- If you become disabled for work
- If your partner dies
The NHG is a private institution which is backed by the government, meaning that it can always fulfill its payment obligations.
So what are the advantages of a NHG mortgage?
As said before, a NHG mortgage is a safety net for both the provider and borrower. In this way, a provider has the security it will not lose on that particular loan and therefore can offer you a very sharp interest rate. Furthermore, if it’s the case that you as a borrower have to sell your house due to problems beyond your control and there is residual debt left in the mortgage, the NHG can remiss this residual debt if there are no options left to repay the rest of the loan.
How much can I borrow with such a loan?
You can apply for a NHG mortgage when you buy existing or new build property in base with a maximum of €265,000. Are you going to renovate the property? Then the purchasing amount and renovation costs in total may not exceed €265,000. A NHG-backed mortgage is also possible when you want to increase your current mortgage, for example for a renovation. Moreover, it’s also possible to apply for the scheme if you are an entrepreneur or have a temporary contract. If you already have a mortgage, sometimes you can switch to a NHG-backed mortgage. Furthermore, remortgaging a NHG loan is also possible. Contact us for your possibilities.
Does it cost money?
A NHG-backed mortgage costs 1% of your total mortgage amount. It is also possible to get a bank guarantee for this. But because banks and other mortgage providers can offer you their low interest rate, most of the time you recoup the costs made for this guarantee quite fast.
Of course, our advisers are happy to help you apply for this guarantee, and advise you on whether this scheme is suitable for you. Get in touch with us today!