Wednesday, September 21, 2011

Buying a house in the Netherlands

My wife and I have considered buying a home in the Netherlands, but obviously the process is intimidating. Last night I went to a seminar on how to buy a house if you're an expat and the lovely folks from Expat Mortgages managed to shock the heck out of me.

Amsterdam house
Amsterdam House
Photo by Michela Mongardi
Mind you, I'm originally from the US but I lived the UK for many years, both places where I saw a different housing market. In fact, the UK today, many young adults simply have no ability to buy a home and the US isn't much better. In the Netherlands today, though, it's still easy and if you're looking to move to Europe and settle down, this might be a big factor for you.

First, most home loans are zero down payment. Sure, you can put money down if you want, but it's not required. Second, like in the US, your interest on the loan is generally deductible from your taxes, meaning that buying, even if you put nothing down, can be cheaper than renting! As for credit rating, it turns out that you really don't want one. Over here, the credit agency generally reports negative items, not positive ones, so if you have no credit rating, that's a good thing!

One gentleman from India asked if he could qualify for a loan. He is a "knowledge worker", has the 30% ruling, a permanent contract, but only a one year residence permit. Not a problem. He's a knowledge worker and apparently the banks consider them a good risk.

So want a home? Get a job here in Amsterdam, get your permanent contract and buy. It's that simple (well, with the help of experts to guide you through the Dutch legal system).

If you're an expat living in Amsterdam already, check out the Expat Housing Seminar. It's free and, even if you don't buy a home, you at least get free drinks and snacks.

And no, I wasn't paid to make this advertisement :)

Update: I removed one comment from this post for using profanity in a derogatory manner. I don't object to profanity per se, but when it's directed at someone else I'm going to remove the response. It's a shame because otherwise that response would have been perfectly appropriate. Here's that anonymous response, minus the profanity:

try anywhere else in the world... any you'll realize you have it much easier than most. I'm nearly 30 and can't even think about buying a place for even 20% down on average home prices in the $700k range.


  1. right, I tried this from my phone, but it doesn't seem to work.. anyway:

    while I am happy for you expat, please note that it is VERY hard for (young) locals to buy a place, needing many, many, MANY more assurances than your example from india, ranging from no-end contracts, money in the bank, additional insurances of good faith from employers to many many others (and even then it might not be enough)

    I know it makes no difference for your particular target audience, but it's a sore point among me and my local peers, so I feel it does warrant a mention.,

  2. This comment has been removed by a blog administrator.

  3. Marte, I had no idea about that. Can you provide me with links for more information? The mortgage broker was pretty clear that we expats may have hurdles that local people won't face, so I'm curious to know the discrepancy here.

  4. having mostly anecdotal evidence from friends wanting to buy, I managed to find this, from a main mortgage supplyer:

    it answers the questions 'can I get a mortgage if I currently don't have an indefinite contract'

    basically: if you can prove that you have had a steady income for the past three years and your current employer will sign a document to the effect that he intends to make your contract indefinite, you MIGHT be able to get a mortgage with the NHG, national mortgage guarantee. if you are not eligible for NHG, you rely on the whims of the banks who offer mortgages, and their terms are far less flexible.

  5. marte: ah, that issue was raised last night. If we don't have an indefinite contract, we're in the same boat.

  6. Superb reading, thanks guys.
    From my experience - if you are single person, with an average income, expat,definite contract, forget it :) So i did.

  7. [quote]
    Second, like in the US, your interest on the loan is generally deductible from your taxes, meaning that renting, even if you put nothing down, can be cheaper than buying!

    Don't you mean the other way around?

  8. @Anonymous: yes, you're right. It's fixed now. Thanks for pointing that out :)

  9. Hi, I'm an expat in Amsterdam and I'm interested in buying a house. What is the average interest rate for a mortgage? Anyone knows?

  10. Hi @Anonymous: I'm told that currently the interest rates vary between the high twos and the low fives. Of course, that will depend on your particular situation, but these are nice rates right now.

  11. I made 3 interactive Infographics showing the trends in the Dutch housing market over the past 12 months :

  12. One thing that expats miss out on that locals are (more) aware of: if you attempt to rent a house, particularly in a comparatively expensive area of the country like Amsterdam (although it's now pretty much true of the whole country), it's very likely you won't be permitted to charge rent enough to cover your mortgage.

    Specifically, if you no longer live in your house yourself, then you lose the mortgage interest tax break and the mortgage cost jumps by potentially 100%. Beyond that, you can charge any rent you like, but the tenant can then ask the huurcommissie to check that the rent you're charging is less than the maximum permitted rent on that property. If they do, and it is, you must reduce it, regardless of the outgoings on your house; and once the tenant is in, you must have a specific reason to evict them (such as, for instance, requiring the house for your own use again).

    Letting agents particularly like expat renters because they often don't know of the above rules... Indeed, you could always try and make sure you rent to an ignorant expat in order to avoid the problem...

  13. (I should add that this is not directly a concern for buying a house. But it's quite a serious concern when you leave the country, as expats are wont to do, and particularly in the current days of slow housing market turnover.)

  14. Hi just wanted to say it is nearly impossible to buy an average sized house overhere for a person from The Netherlands. No employer gives infinite contracts nowadays and the max. mortgage you can get has been lowered by the banks and government.

    I got a bachelor in Marketing, 5yrs. working experience as a freelancer and make a 1,5 - 2 times the average income. No wife and kids. I can buy nothing since a contract is always required, even if you earned quite a lot of money the last few years!

    With renting it's the same thing: rental market is owned by corporations who demand you have an infinite contract. Which no-one here gives out anymore....

    As a result i am renting from a private person for 1400 euros/ month, which is ridiculous. The system completely sucks and even according to several international reports about the housing market the housing market in NL is mainly a big Bubble about to blow.

    I can only hope it blows fast so i can buy a house in a few years or so...