What impacts your maximum mortgage?
If you’re an expat planning to move to the Netherlands or already living here, buying a home might be on your agenda. Knowing the factors that negatively affect your maximum mortgage is crucial. This guide will help you understand these factors.
Our goal is to make it easier for you as an expat to navigate the Dutch mortgage landscape. Feel free to contact us or calculate your maximum mortgage yourself with our online calculator.
EU vs Non-EU residency
Your mortgage opportunities in the Netherlands are influenced by whether you’re a resident of an EU or non-EU country. EU residents usually find the mortgage application process more straightforward due to shared financial regulations within the European Union. However, for non-EU residents, including Britons post-Brexit, the requirements can be more stringent. For example, a British expat who could have easily secured a mortgage before Brexit now need to proof a resident permit. But still a lot is possible and our mortgage advisors know exactly what fits best in your situaton for a mortgage in the Netherlands.
Income and contract Type
The kind of employment contract you have plays a significant role in your mortgage eligibility. For those with a permanent contract with a Dutch employer and if applicable a resident permit as a knowledge worker, the process is often smooth. However, if you’re a freelancer or have multiple sources of income, your financial situation may be assessed differently. For example, a German expat with a permanent contract with a Dutch employer may receive a higher maximum mortgage than an American expat just started his business here in the Netherlands working freelance.
Income from outside the Netherlands
If your income is in a currency different than the euro, it can negatively affect your mortgage application in the Netherlands. The mortgage providers always will take a security for fluctuations in the rate of the currency. For example, an American expat earning in US dollars living and working from the Netherlands may face challenges in 2023. When converting income to euros for mortgage calculations, lenders often use less income. This can result in a lower maximum mortgage amount.
Credit History and BKR
In the Netherlands, credit history is managed differently than in countries where accumulating debt to build credit is common. Here, credit histories are maintained by the Bureau Krediet Registratie (BKR) in Germany that is Shufa etc. Lenders often check credit registrations from other countries.
Loans and Financial Obligations
Financial obligations incurred within the Netherlands, like personal loans, are registered with the Bureau Krediet Registratie (BKR) and can impact your maximum mortgage. For example, if you’re an expat living in the Netherlands and you have a €20,000 personal loan from a Dutch financial institution, this will be registered with BKR. This could potentially affect your mortgage eligibility and lower the maximum amount you can borrow.
Car Leasing
Similarly, leasing a car is considered a financial obligation and is registered with BKR. An Italian expat leasing a car for €400 per month will find this financial commitment recorded with BKR, which will affect the mortgage amount they are eligible for.
Conclusion
The ability to secure a mortgage in the Netherlands and the amount you can borrow are influenced by various factors. These include your EU or non-EU residency status, the nature of your employment contract, any income from outside the Netherlands, and your credit history as recorded by BKR, including existing financial obligations like loans and car leases. Given that each situation is unique, obtaining professional advice tailored to your specific circumstances is highly recommended.
