Dutch Mortgage Dictionary

Dictionary: What does it all mean?

As you know, myDutchMortgage.online offers a simple and secure way to apply for a Dutch mortgage online, entirely in English. But you are still likely to come across a lot of Dutch words and other bits of jargon while looking to buy a home. Here’s a list to help you.

A:An interest-only mortgage is a mortgage in which you only pay interest on the loan and agree to repay the capital at the end of the mortgage period from savings or investment accounts.
A:The local authority levy for dealing with rubbish.
A:With an annuity mortgage, the lender works out the amount you need to repay each month to clear your mortgage by the end of an agreed term. Your monthly repayment is made up of an interest payment on the loan (which will reduce over time) and a capital repayment (which increases over time).
A:With a bankspaarhypotheek you will save money at a fixed rate. This rate is equal to the mortgage interest rate, and at the end of the term you will be sure that you have saved enough money to repay the mortgage loan.
A:A report on the state of the property carried out by an expert. Recommended for older properties or those in areas with a lot of subsidence.
A:This is basically a small percentage of the official value of your property which is added to your income and taxed. In 2021, this is 0.5% for properties valued at under €1.100,000. Often, this can be offset against your mortgage interest payments.
A:Erfpacht or ground rent, is the amount home owners have pay to the owner of the land their house is built on. In many cases this will be the local council, but it could also be a private person or company.
A:A combination of interest-only, savings and investment mortgages. You make interest payments but you have flexibility in how you generate the capital to repay the loan.
A:The formal document from your bank or mortgage provider outlining the terms of your loan.
A:The Netherlands is one of the few countries in Europe with such as generous tax break on home ownership. This means that you can offset the cost of your interest payments against tax for a maximum of 30 years. In 2021, the rate of deduction is 43% but this is gradually being reduced by the government.
A:The official register of who owns which property in the Netherlands.
A:A formal legal document signed by the buyer and the seller, which includes a standard three-day cooling off clause.
A:This means that all the costs involved in buying a house – transferring ownership in the land registry, notarial costs for drawing up the contract and the property transfer tax – are to be paid by the buyer. This usually adds up to around 5% of the value of the property.
A:A credit mortgage (krediethypotheek) is a flexible mortgage. You pay monthly interest on the amount you borrow, which depends on the value of your house.
A:Life insurance is not mandatory when taking out a mortgage in the Netherlands.
A:The formal document for the transfer of ownership of the property.
A:The linear mortgage repayment is made up of an interest payment on the loan (which will reduce over time) and a capital repayment (a fixed amount per month).
A:Often in the Netherlands, a house sale will involve two estate agents, one acting on behalf of the seller and one acting on behalf of the buyer.
A:If you used an estate agent to negotiate the sale on your behalf, you will have to pay a fee for their services. The amount is usually open to negotiation but will probably be between 0.85% en 1.25% of the purchase price.
A:The NHG is a government scheme that covers homeowners’ losses if they have to sell their house for less than the outstanding mortgage because of divorce, illness or unemployment. Homeowners pay a surcharge of 0.7% on their mortgage to cover the cost of the scheme, but are often able to borrow at lower rates because of the reduced risk. In 2021, the scheme covers properties of up to €325,000.
A:A civil lawyer specialised in family and private law who will execute the formal documents involved in buying a home.
A:Gas, electricity, internet and television providers.
A:The value of a property is not enough to cover the outstanding mortgage.
A:‘Overdrachtsbelasting’ or property transfer tax, amounts to 2% of the price property for most people but in 2021 was cut to zero for first-time buyers under the age of 35.
A:The amount of property tax you pay depends on the value of your property.
A:The amount you pay to your local authority for sewerage.
A:A savings mortgage or endowment mortgage (spaarhypoteek) is linked to a life insurance policy with a guaranteed return to cover the cost of the principal loan.
A:A formal report valuing the property by a licenced valuation company.
A:A clause in your mortgage terms and conditions which says if you can take your mortgage with you when you move to another house.
A:This means the property has been sold, as long as certain conditions are met – often relating to the financing.
A:If you buy a property in an apartment complex, under Dutch law you will have to become a member of the ‘Vereniging van Eigenaren’. The VVE ensures the property is well maintained and insured and deals with communal expenses.
A:The ‘Wet Waardering Onroerende Zaken’ is the official value of your property, determined by your local authority. The WOZ value is adjusted once a year and is used to calculate the amount of local council taxes home owners pay.