House prices have increased dramatically in the Netherlands over the last few years. In fact, just last year, the average increase was about 11%. If you already own a home, this surge in property value can actually work in your favor. Especially when it comes to reducing your mortgage interest rate without remortgaging.
A lower interest rate means lower monthly payments, which can result in significant savings over time. But how exactly does it work? And what steps should you take to reduce your mortgage interest rate in the Netherlands? Let’s break it down.
How your mortgage rate is determined
Your mortgage interest rate depends on various factors. These include market conditions and lender policies. Most importantly, it depends on the risk level linked to your loan.
One of the key aspects lenders assess is your loan-to-value (LTV) ratio. This refers to the percentage of your mortgage compared to the current value of your home. The lower this percentage, the lower the risk for your lender, and lower risk often leads to lower interest rates.
For example:
- If you originally borrowed €500,000 to buy your home, and its value was €500,000, your loan-to-value ratio was 100%.
- Still, if your home is now worth €550,000, but your mortgage remains €500,000, your loan-to-value ratio has dropped to 91%.
Since lenders classify risk based on LTV thresholds (e.g., 100%, 90%, 80%). This decrease could qualify you for a lower interest rate, meaning smaller monthly payments without you having to do anything!
Why a Lower Mortgage Interest Rate Matters?
A small drop in interest rates can lead to huge savings over time. Here’s a simple example:
Imagine you originally had a 3.5% mortgage interest rate on a €500,000 loan over 30 years. If the rate drops to 3.0%, your monthly payment can decrease by €150 – €200, saving you thousands of euros in the long run.
Lower interest rates mean:
- smaller monthly payments.
- less total interest paid over your mortgage term and
- more money left for savings or investments.
But, how can you check if you qualify for a lower interest rate?
Check with Your Mortgage Provider
Your mortgage lender determines whether and by how much your interest rate can be reduced. If property values have increased this year, it’s worth reaching out with your lender to check if you qualify.
Here’s what lenders usually accept as proof of increased home value:
- WOZ (Waardering Onroerende Zaken) Value – Your annual tax assessment, often accepted as proof.
- Calcasa Report – A reliable automated valuation report that costs around €95 (in 2025).
- Official Property Valuation – Done by a licensed real estate evaluator, usually costs €300+.
Before investing in a valuation report, make sure the potential interest rate reduction is worth it!
Please check if a reduction of the interest rate does not apply to you. This is the case if your mortgage falls under the National Mortgage Guarantee (NHG).
How to Take Action Today
Step 1: Check Your WOZ Value
Each year, homeowners get a WOZ statement from the municipality. A higher WOZ value could show that your home’s market value has increased.
Step 2: Check the price per square meter for houses in your area
You can check the selling price per square meter of houses in you neighborhood in Funda. Or you can check your estimated house value in Huispedia or Walterliving.
Step 3: Check with Your Lender
Check if a WOZ value, a Calcasa report, or another valuation can be used to adjust your interest rate.
Step 4: Compare Costs & Savings
If an official valuation is required, verify the potential interest rate discount. Decide if it justifies the cost of obtaining the valuation report.
Step 5: Secure Your Reduced Mortgage Interest Rate in the Netherlands
If your lender approves the change, they will update your mortgage terms. This will allow you to benefit from lower monthly payments right away.
Don’t Miss Out on Savings!
Rising house prices can seem intimidating, but if you already own a home, they can actually work in your favor. You may qualify for reduced mortgage interest rates. This can be achieved by taking advantage of lower loan-to-value ratios. You don’t have to do much at all.
Until next time, stay savvy.
