Dutch National Mortgage Guarantee (NHG)

An NHG-backed mortgage

NHG explained

When buying a home, you can opt to take out a mortgage that includes the Dutch National Mortgage Guarantee (NHG). This means that your mortgage is guaranteed by the Dutch Homeownership Guarantee Fund (Stichting Waarborgfonds Eigen Woningen), so your risk and your interest rate will both be lower. In 2020, you can take out a mortgage with this guarantee if your home does not cost more than € 310,000.

 

The benefits of the NHG

  • Your interest rate will be up to 0.50% lower than for a mortgage not backed by the NHG.
  • When taking out an NHG-backed mortgage, you can deduct the NHG fee from your taxable income.
  • If you take out an NHG-backed mortgage, you can be sure that your mortgage fits your finances, as the mortgage adviser will assess your mortgage application based on the responsible mortgage standards set by the Dutch National Institute for Family Finance Information (Nibud).
  • The NHG gives you a safety net to fall back on if, for example, you make a loss when selling your home. And if you lose your job, become unfit for work or get divorced, the Dutch Homeownership Guarantee Fund (Stichting Waarborgfonds Eigen Woningen) can help you find a solution.
  • You can take out an NHG-backed mortgage for a new-build property, existing home or for a renovation or refurbishment project.
nhg mortgage netherlands
 

NHG in 2020

Terms and conditions and standards for the Dutch National Mortgage Guarantee in 2020

The terms and conditions and standards for the Dutch National Mortgage Guarantee for 2020 are specified below. For the last few years, the NHG limit has been linked to average house prices. As a result, this year’s limit has increased further, so more people will be eligible for an NHG-backed mortgage when buying a new home or remortgaging. 

  • NHG limit  
    In 2020, the maximum amount for an NHG-backed mortgage for existing and new-build properties is € 310,000. 
  • Energy-efficiency measures
    When energy-efficiency measures are included in the mortgage, the limit is even higher: € 328,600. This means that you can borrow up to an additional € 18,600 in 2020 for energy-efficiency measures (i.e. up to 6% on top of your home’s market value) if you also use your NHG-backed mortgage to pay for them. 
  • Lower mortgage guarantee fee
    You will be charged a mortgage guarantee fee for an NHG-backed mortgage. In 2020, this fee has gone down by 0.2% to 0.7% of the mortgage amount. 
  • Remortgaging
    In 2020, you can switch from a mortgage without the NHG to an NHG-backed mortgage, provided your mortgage fulfils the NHG conditions.
 

Costs of the NHG

Costs applicable to the Dutch National Mortgage Guarantee

When taking out an NHG-backed mortgage, you will pay 0.7% of the amount you borrow for the purchase of your home. This means that if you were to borrow € 200,000 for a mortgage backed by a Dutch National Mortgage Guarantee, the fee payable would be € 1,400. The fee is payable to your lender when you take out the mortgage. Payment will be arranged by the notary.

Maximum NHG-backed mortgage amount

Our easy-to-use calculator helps you find out the maximum loan amount for an NHG-backed mortgage. If you are indeed eligible for such a mortgage, the calculator will tell you instantly under ‘Your personal calculation’.

 

The NHG and mortgage shortfalls

Financing and covering a mortgage shortfall

If you are no longer able to make your monthly mortgage payments, if you get divorced, become disabled or lose your job for instance, an NHG-backed mortgage gives you a safety net. Of course, it will still be your responsibility to find a solution that will get you back to making your monthly payments, but NHG and ABN AMRO will support you in this, looking for ways to make your mortgage affordable for you again. If selling your home eventually turns out to be the only option and the proceeds from the sale are not enough to pay the outstanding balance on your mortgage, NHG may, on certain conditions, cover the mortgage shortfall or include it in a new mortgage.

Terms and conditions of the NHG

You will be eligible for an NHG-backed mortgage if you meet the conditions. If you are refurbishing your home, the applicable conditions will be different to when buying a home. 

The main NHG eligibility criteria in 2020 are:

  • The total amount payable for the purchase of the home or when remortgaging must not exceed € 310,000.
  • The maximum interest-only percentage of your loan is 50%.
  • The maximum term of an NHG-backed mortgage is 30 years.

In 2020, you can take out an NHG-backed mortgage of up to € 310,000 to purchase a home. This amount is called the maximum permitted financing cost and is based on the average price of a home in the Netherlands. As a result, the amount you spend on your home, plus any renovation costs, cannot exceed € 310,000. If you are planning on investing in energy-efficiency measures for your home, the maximum permitted financing cost is € 328,600 (106% of the home’s market value).

If you want to improve the quality of your current home and borrow more on your mortgage to pay for it, you can remortgage to an NHG-backed mortgage. This is subject to certain conditions. The total mortgage cannot exceed € 310,000. If you are planning on investing in energy-efficiency measures for your home, you can borrow up to € 328,600 (subject to terms and conditions). The amount you want to spend on energy-efficiency measures will be paid into a building fund account. 

Quality improvement includes taking care of overdue maintenance and making improvements or extensions to the home, such as fitting a new kitchen. The costs of any quality improvement must be confirmed by a valuation report, a structural survey and/or a specification compiled by you.

 

Applying for an NHG-backed mortgage

Employer’s statement for the NHG

If you are in employment and want to take out an NHG-backed mortgage, you will need an employer's statement. Your mortgage adviser will remind you of this during the orientation meeting for mortgage advice.

Free mortgage meeting

If you would like to talk to someone about your options for an NHG-backed mortgage, please make an appointment for a no-obligations orientation meeting. Simply complete the appointment form and an adviser will call you to schedule a meeting. 

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