Choosing the right mortgage is one of the most important steps in buying a home. In the Netherlands, there is a variety of options tailored to different financial situations. Understanding the types of mortgages in the Netherlands will help you make smart, future-proof decisions.
In this blog, I’ll explain the most common mortgage types in the Netherlands. I will highlight their pros and cons. I will also help you figure out which one might be best for your needs.
1. Annuity Mortgage (Annuïteitenhypotheek)
The annuity mortgage is one of the most popular choices in the Netherlands, especially among first-time buyers.
How It Works:
You pay a fixed monthly amount, which includes both interest and principal. Early in the mortgage term, you’ll mostly pay interest. Over time, more of your payment goes toward repaying the loan.
Pros:
- Predictable monthly costs (ideal for budgeting).
- Eligible for mortgage interest tax deduction if it’s your primary residence.
- Full repayment within 30 years maximum.
Cons:
- You build equity more slowly in the beginning. If you plan to sell in the short-term it might not be the best choice.
Best For:
If you want stable payments and plan to stay in the home long-term.
2. Linear Mortgage (Lineaire Hypotheek)
With a linear mortgage, you repay the same amount of the principal every month, plus interest on the remaining balance.
How It Works:
Monthly payments start high but gradually decrease as the interest part declines.
Pros:
- Faster loan repayment. If you plan to sell in a short time-frame it might be the right choice.
- Less total interest paid over time.
- Eligible for mortgage interest deduction.
Cons:
- Higher first monthly payments can be a burden.
Best For:
If you have a strong financial position and/or want to reduce interest costs.
3. Interest-Only Mortgage (Aflossingsvrije Hypotheek)
This type of mortgage enables you to pay only interest during the mortgage term. The loan principal is repaid in full at the end of the term, or when you sell the home.
How It Works:
You make interest-only payments for the duration of the loan. You’re expected to repay the full principal at the end.
Pros:
- Lowest monthly payments.
- More financial flexibility.
Cons:
- Not eligible for tax deductions on new mortgages (since 2013).
- You must repay the full loan later, which can be risky without proper planning.
Best For:
If you have significant savings or other investments, it may be best to keep your cash accessible. This is also important if you are nearing retirement and don’t want to tie up your cash.
4. Bank Savings Mortgage (Bankspaarhypotheek) (Only for existing mortgages)
This choice has not been available for new mortgages since 2013. Still, it’s still relevant for people who already have one.
How It Works:
You pay interest and save in a linked savings account. At the end of the term, the savings are used to pay off the mortgage.
Pros:
- Tax-efficient savings.
- Predictable long-term costs.
Cons:
- Less flexible than modern options.
- Only available if you already had one before 2013.
Extra Factors to Consider
Fixed vs. Variable Interest Rate
You can choose a fixed rate (for 1 to 30 years) or a variable rate that changes with market conditions. Fixed-rate mortgages offer certainty, while variable rates can be cheaper in the short term but riskier long-term.
NHG – National Mortgage Guarantee
If your mortgage is under a certain threshold (€470,000 in 2026), you might qualify for NHG (Nationale Hypotheek Garantie). This offers protection in case you can’t pay your mortgage due to unforeseen circumstances, and often lowers your interest rate.
Mortgage Interest Deduction (Hypotheekrenteaftrek)
If the home is your primary residence, you can deduct the mortgage interest from your taxable income. This applies when you’re repaying the loan over 30 years. This provides a big financial advantage in the Netherlands.
- The mortgage usually can be moved to another house with the same conditions (it has to be your main residence).
- You can get a mortgage for 100% of the value of the house.
- Usually you can repay the mortgage for up to 10% of the total amount per year.
- Usually you can reduce your interest rate if the house value has increased.
Tips for Applying for a Dutch Mortgage
- You don’t need to be a Dutch citizen to get a mortgage. Still, most banks require you to be a resident with a BSN (citizen service number).
- Income and employment stability are key. If you do not have a permanent contract you can ask your employer for a letter of intend (werkgeversverklaring). This helps a lot for getting an approval from the bank.
- You can work with an independent mortgage advisor (hypotheekadviseur) or find a mortgage provider by your self. They usually save you time and can find you a good mortgage deal.
The best type of mortgage in the Netherlands depends on your financial situation, long-term goals, and risk tolerance. If you value stable monthly payments, an annuity mortgage is probably the right fit. If you can handle higher payments early on and want to save on interest, a linear mortgage might be better. And if you’re an investor or nearing retirement, an interest-only mortgage can offer flexibility – with careful planning.
Stay savvy.
