The number of neighbourhoods with more than one million euros average property values has increased dramatically over the last few years.

Do you have plans to purchase a property worth over a million euros? Then you are not a typical client. High-value mortgage applications work differently than standard mortgage applications. Some mortgage lenders even consider a mortgage of over 750.000 euros a high-value mortgage.

What is a high-value mortgage?

Some mortgage lenders consider a high-value mortgage valued at over € 750.000 already.

How does the process work?

The mortgage application process works in a similar way to a regular mortgage. The first step is to understand how much you can borrow and place a bid. When an offer is accepted, you have to submit documents for a mortgage application. Additional documents are required to submit a mortgage application of over a million. For this reason, the mortgage process takes longer than when it comes to a regular mortgage.

Types of interest rates

A client can choose from different types of mortgage:

1. Annuity.
2. Linear.
3. Interest-only.

Mortgage interest rates have decreased drastically in the last years in the Netherlands. Declining mortgage interest rates pushed the property prices up and increased the demand to borrow more in 2021.

Here are a few things that are good to know if you are planning to buy a property of over a million euros:

Fewer mortgage lenders to choose from

There are more than 30 mortgage lenders in the Netherlands; however, not all the lenders have the necessary expertise to assess a mortgage of over a million euros.
Lower loan-to-value amount

When you apply for a regular mortgage, you can get a 100 percent loan-to-value mortgage as long as you can afford this. However, a lending restriction could apply to high-value mortgages. In most cases, mortgage lenders approve a mortgage up to 80 of 90 percent of the loan to value. The rest must come from personal assets.
Mortgage risk assessment

It takes more time to approve a higher mortgage due to the risk factors. Many banks and mortgage lenders have strict risk management procedures and capital requirements. This is because lenders aim to make sure wealthy clients have sufficient funds or security to afford the mortgage. For example, what happens if one of you passes away, loses their job, or can’t work anymore? If you buy a million-euro home, you can be sure that your mortgage application will be reviewed separately by a credit committee or a risk management department.
Proof of personal wealth

If you plan to get a high-value mortgage, the bank will perform additional research to ensure you’re not a risk to them in any way or form. Mortgage lenders, civil notaries, and mortgage brokers are obliged to identify the source of original funds to prevent money laundering and counter-terrorist financing in the Netherlands. Make sure you already have the paperwork to show the source of your funds, preferably translated into Dutch.

How long does it take to approve a mortgage above a million?

On average, mortgage applications for over a million can take from four to six weeks. A mortgage lender spends more time assessing different assets, including savings, income, or other investments and securities, as stated above.

Do you need to finance a home over a million?

Schedule a complimentary introductory call with our mortgage specialists. We specialize in mortgages for expats and are dedicated to navigating you through the home-buying process.