Differences between residential and buy-to-let mortgages:
  • A residential mortgage is for individuals who plan to live on the property. Residential buyers can get a loan up to 100% loan to value. 

  • A buy-to-let mortgage is for individuals who plan to buy a home as an investment. A rule of thumb is that investors can get a mortgage up to 70% loan-to-value (LtV).

Buy to let requirements 2022
  • You must contribute 30 % of the property price from your savings or equity from an existing property.

  • You need to be registered and live and work in the Netherlands.

  • You must pay 8% of transfer tax and other closing fees (real estate agent, valuation report, notary, translator, and mortgage brokerage fees). From 2023, the transfer tax will increase to 10.4 %.

Purchase protection law 2022

Dutch cities have implemented a new regulation in 2022 to prevent investors from taking away homes from first-time home buyers. If you want to invest in real estate, you must fulfill the requirements.

For example

Purchase price: € 315,000

  • Expected rental income: € 1,386

  • Required funds: € 100,350

  • Net return: 4.27%

  • Cash-on-Cash return: 2.76%

Purchase price: € 450,000

  • Expected rental income: € 1,698

  • Required funds: € 184,500

  • Net return: 3.81%

  • Cash-on-Cash return: 1.32%

Purchase price: € 600,000

  • Expected rental income: € 2,050

  • Required funds: € 264,000

  • Net return: 3.38%

  • Cash-on-Cash return: 1.15%

Conditions:
  • Suitable for long-term rent.

  • No short-term rentals, holiday homes, or Airbnb.

  • Owners of investment properties cannot live in the property as residents.

    *If you plan to live in the buy-to-let property as an owner, you must refinance your mortgage to a residential mortgage.

     

How does it work:
  • Dutch mortgage lenders review the property you plan to purchase.

  • A valuation report is required to determine the property's value, market value, and expected rent.

  • Mortgage lenders check if VvE is healthy.

  • Rental income is always one of the key indicators when applying for a buy-to-let mortgage.

  • Mortgage lenders check your income and savings to determine how much mortgage you can afford.

Buy-to-let mortgage lenders
  • Mortgage lenders have different requirements to apply for investment mortgages.

  • The buy-to-let market is small in the Netherlands. Only a few lenders offer investment products: Dynamic Credit, Nationale Nederlanden, Lloyds bank, NIBC, De Nederlandse, Domivest, RNHB, and Woonfonds.

  • Mortgage lenders work only with mortgage brokers. Please contact us for investment opportunities in the Netherlands.

  • Not all buy-to-let mortgage products are available for internationals (expats).

  • Higher interest rates apply to investment mortgages.

Residential homeowners with a mortgage are taxed in Box 1, while property investments are taxed in box 3.The Netherlands doesn't have a capital gains tax. So rental income is not taxed if the property is in box 3. If you buy the property as a real estate BV, the situation changes—for example, a capital gains tax as it becomes part of the BV profit.

You are refinancing when you switch your residential mortgage to a buy-to-let mortgage. In most cases, you must pay the penalty to your existing mortgage lender for breaking your current contract.
How to refinance a residential mortgage to a buy-to-let mortgage?

Let say you took a residential mortgage some time ago. Now you plan to move away from the Netherlands, and you want to rent your property out. Your current mortgage lender does not offer investment products, so you must switch mortgage lenders.Note: not all mortgage lenders offer an investment product in the Netherlands. Only a few lenders like ( NIBC, Nationale Nederlanden, or Dynamic Credit offer buy-to-let mortgages. For more information, please contact us.

Mortgage penalty

If you plan to switch mortgage lenders, you usually pay the prepayment penalty to your current lender. The prepayment penalty depends on:1. The duration of your fixed term.
2. Fixed interest rate.
3. Difference between your interest rate and current interest rates.
4. Mortgage lender terms.

For example, your mortgage sum is € 400,000. The fixed interest rate for ten years is 1.70%. You break the deal with an existing bank after seven years. You still have three years remaining to pay. Your penalty will be the sum of the interest rate for three years minus the current interest rate payments.

Before investing in real estate, ask yourself:

1. What type of property do you want to buy (new project, luxurious apartment, student apartment)?
2. What rent do you expect?
3. How much profit do you expect to get after taxes?
4. Research the neighborhood and WOZ value. Find out how much rent cost in a similar area.
5. How will you cover maintenance expenses?
6. Do you have plans to hire a company to manage your property?
7. How do you plan to cover monthly mortgage payments if you are not able to find new tenants?
8. Six tips for buy to let before you start.

Let us check your buy-to-let mortgage options in the Netherlands
Your buy  to let journey with Mister Mortgage

During the 10-minute call, we discuss your eligibility and answer your questions. We invite you to our online mortgage portal.

10-minute intake call.

We set up a mortgage overview based on the uploaded documents.

30 -minutes analysis

We arrange a meeting to discuss possible mortgage lenders before we submit your application.

45 - minute call

We manage all required communication with your mortgage lender.

Mortgage application

It is time to sign a mortgage agreement when your mortgage is approved.

Mortgage approval

Your notary sends you a statement of completion with closing fees. In the Netherlands, you pay closing fees the day you visit the notary.

Closing fees

It's time to sign a mortgage deed at the notary.

Transfer date

Meet the team
Sezer Yilmaz
Founder & Financial Specialist
Egle Kemezyte
Growth Marketer
Robin Uijtdehaage
Commercial Director & Financial Specialist
Özkan Karakol
Financial Specialist