Netherlands Mortgage Rates & Home Prices
Netherlands mortgage rates are generally among the lowest in Europe, making it a good place for expats to invest in a property. Over the past couple years, the central banks have raised interest rates. Current mortgage interest rates are between 3.5-5% depending on the type of mortgage and the lender.
NETHERLANDS MORTGAGE RATES & TYPES
In general, there are two types of mortgages in Netherlands: fixed-rate and variable-rate. A fixed-rate mortgage has a fixed interest rate, meaning the rate remains the same throughout the mortgage term. On the other hand, a variable-rate mortgage has an interest rate that fluctuates based on the market. As a result, the monthly payments can vary.
Fixed-rate mortgages are popular among expats as they offer stability and predictable payments. In the Netherlands, fixed-rate mortgages typically come in 10-year, 20-year, and 30-year terms. The interest rates on fixed-rate mortgages are typically higher than variable-rate mortgages when the current market rate is below the long-term average. Conversely, if the current interest rate is above the long-term average, a fixed-rate mortgage will have a lower interest rate than an adjustable.
Variable-rate mortgages have advantages and disadvantages. If market interest rates decline, your mortgage payments are likely to go down. However, if market interest rates go up, your mortgage payments will likely increase. In the Netherlands, variable-rate mortgages are typically tied to the Euribor rate, which is the interest rate European banks use to lend to one another.
The current Netherlands mortgage rates for a 30-year fixed-rate mortgage is around 3.9%, while the average variable-rate mortgage is 4.9%. Visit the Hanno website for a complete and independent overview of current Netherlands mortgage rates including terms and conditions.
NETHERLANDS HOUSING MARKET & HOME PRICES
Home prices in Netherlands hit an all-time low in 2013 and then rose to record levels. Overbidding on a house became the rule rather than exception. Prices continued to rise sharply through the first half of 2022 when the average selling price of a home in Netherlands reached €448,000.
This was followed by a short cooling period in the Dutch housing market due to a significant rise in interest rates. This monetary policy adjustment aimed to curb inflation and stabilize the economy, inadvertently impacting borrowers’ affordability and dampened demand for housing.
The Netherlands housing market has experienced a notable resurgence in 2024. After adjusting to the new interest rate environment, buyer confidence returned, as well as higher home prices. Factoring into the housing market resiliency are improved economic conditions, a persistent housing shortage, and robust demand, particularly in urban areas like Amsterdam, Rotterdam, The Hague and Utrecht.
PROJECTED HOME PRICES IN NETHERLANDS
Banks like ABN Amro and Rabobank are projecting a cautiously optimistic outlook for the Dutch housing market. This stems from the combination of factors listed above plus the stabilizing effect of the previous year’s interest rate adjustments. While mindful of the potential that macroeconomic shifts and policy changes can have on market dynamics, financial institutions generally remain confident in the underlying strength of the Netherlands housing sector and its capacity for sustained growth, albeit at a more tempered rate than in the past.
A HOUSING SHORTAGE REMAINS IN NETHERLANDS
The Netherlands housing market has been tight for years, with too few houses for sale against high demand. Few homes were built during the previous housing crisis and the construction of newly built houses has been under pressure due to the nitrogen crisis, higher materials costs, increased wages, rent-control restrictions and more. It will take an extended period of time (and a lot more homes) before the housing shortage will be under control.
At the same time, a strong economy combined with high rental costs in the private sector and falling Netherlands mortgage rates, will continue to fuel the growth in potential home buyers.
It is important to note that the frequency of overbidding for a property in Netherlands has decreased during the past 12-18 months. And for those who are overbidding, the amount is much lower than it used to be. This is a major change from early 2022 when 80% of the houses were sold above the asking price.
TO BUY OR NOT BUY A HOME IN NETHERLANDS?
The Dutch housing market is showing renewed signs of life and home prices are expected to keep rising. So if you are trying to decide whether to buy or not to buy a house in the Netherlands, the simple answer is… if you can afford it, you should.
Good preparation is important prior to your house hunt as it will significantly improve your chances of successfully buying a house in Netherlands.
Here are three tips to help you purchase your dream house:
- Hire a real estate agent: if your house hunting in a popular area, a realtor will give you a much better shot at actually buying a house. He or she has knowledge of the local housing market and knows in advance which houses will come on sale. With an estate agent you’ll be one up on your competition.
- Put in a good opening bid: take your opening bid into careful consideration (an estate agent can also advise you on this!). If your offer on a house is too low, you’re out. However, if you overbid too much, you’re wasting your money.
- Book a free appointment with a mortgage advisor: it’s important to explore your mortgage options in the Netherlands in advance. This way you’re sure about your budget and you might be able make your offer more attractive by leaving out the financing clause. Want to know what’s possible for you? Book a free consultation with our experienced mortgage advisors.
Related information…