How to pick the right mortgage for your pocket

So, your landlord is putting up the rent or kicking you out, or you have simply decided to put your money into paying off your own mortgage rather than someone else’s. Good move.
How to pick the right mortgage for your pocket
Credit: Photo by Robert Anasch on Unsplash

So where do you start? Here’s our quick guide to the types of mortgage in the Netherlands that you can choose from. First things first. If you want to take advantage of the generous Dutch tax relief on your mortgage interest payments, you have two options.

Yes, there are lots of different sorts of mortgage available in the Netherlands, but only two allow you to deduct your mortgage interest payments from tax - the annuity mortgage (annuïteitenhypotheek) and the linear mortgage (lineaire hypotheek).

Annuity and linear mortgages

An annuity mortgage, also known as a repayment mortgage, is the most common type. 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 two parts - an interest payment on the loan which will reduce over time and a capital repayment, which will increase.

With a linear mortgage, you repay the mortgage loan by a fixed amount every month. On top of this you pay interest, but the interest payments will reduce over time since you are gradually paying off the mortgage loan.
Good to know: during the early years of the mortgage period, the annuities mortgage usually has lower monthly payments than a linear mortgage.

Other Dutch mortgages

There are several other types of mortgage in the Netherlands, but if you use them, beware! You will not be entitled to the tax break. Nevertheless, they might fit your particular situation. You can check out the different types in the section covering faqs
If you do opt for one of these types of Dutch mortgage, you will need to visit a specialist financial advisor – is a fully automated service for first-time buyers and these mortgages need a bit more background work.

If you do the sensible thing and opt for an annuity or a linear mortgage, you will be able to cut your tax bill – provided the property is your main place of residence. How much you can claim depends on your income and in general, the more you earn, the more you can deduct. The government is gradually reducing the tax break – it went down to 36.93% in 2023 and will go down again in 2024 – but at the moment, it is a very useful saving!

Check out our check list for other things you need to think about when buying a house in the Netherlands.

And worth pointing out again: is completely independent, with no ties to any bank or other mortgage provider, allowing us to find the best possible mortgage for you from the widest choice. That means we can always get you the sharpest deal!