What is the Dutch National Mortgage Guarantee (NHG)?

If you’re an international who is looking to settle down and get a mortgage in the Netherlands, you’ve probably come across the term: Nationale Hypotheek Garantie (NHG). While you may not know what it means, trust us: it’s very important. 

Especially if you want to take the leap and buy a home with a few extra safety nets attached. What do we mean? Let’s get into it.  

First things first, what is the NHG? 

The Nationale Hypotheek Garantie translates to the National Mortgage Guarantee. 

The NHG is a guarantee on your mortgage that’s available in the Netherlands. It offers protection against any remaining debt if you can’t pay your mortgage due to involuntary unemployment, divorce, or inability to work.

Should anything like this happen, the people at the NHG and your bank will try to find solutions so that you are able to stay in your house (instead of selling it).

If you are forced to sell your house and have to sell it for less than your mortgage balance, the NHG will cover the debt that’s left. Phew!

The NHG will cost you 0.6% of the mortgage amount. However, it comes with great benefits and is a popular option among hopeful Dutch and international homeowners in the Netherlands. 

What are the requirements for the NHG?

It’s important to know that the NHG is not available to everyone. In fact, there are a number of requirements that need to be met in order to benefit: 

• If you have a permanent contract, your gross annual income will be taken into account. “If you have a temporary contract, you must be able to show a letter of intent for an indefinite contract from your boss,” Fred explains. “If you have a flexible contract or you can’t get the required intent for an indefinite contract, the average income over the past three calendar years will be taken into account. Hopeful buyers should also note that a probation period must have been passed first.”
• If you own a freelance business, you must prove that you have earned an income from the business over the past three calendar years, and you must be registered at the Dutch chamber of commerce. However, there are other ways to meet this requirement, Fred tells us. “Sometimes it’s possible to show just one calendar year of your business’s earnings plus showing the earned income from the same type of work as an employee in the two years before.
• The purchase price of the house, including renovations, must not exceed the NHG limit.
• Debt can also have an impact. “If you have a personal loan, credit line, overdraft or any other financial obligation such as a private lease car or mobile phone contract, your loan-to-income range will be affected. Ground lease and leasehold payments will also be taken into account.”

That’s right, you do not need a permanent contract in order to qualify for the Dutch National Mortgage Guarantee (NHG)! 

What is the NHG limit in 2022?

When it comes to applying for an NHG mortgage, it’s important to note that there’s a price cap on the expense of the home you wish to take out a mortgage on. 

In 2022, the NHG is only available for house sale prices in the Netherlands that are a maximum of €355,000. However, in 2023, this will rise to €405,000. 

However, there’s one exception to this rule: if you want to take measures to make the home more sustainable, then the mortgage value can be raised to 106% of the value of the home. 

This means that if you want to get an NHG mortgage on a house worth €355,000 but you want to take measures to make it more sustainable, then the borrowing limit will be raised to €376,300. 

The extra money must be used for sustainable renovations, of course, like installing solar panels or better insulation. 

Are internationals in the Netherlands eligible for the NHG? 

In short, yes! If you are eligible for a mortgage in the Netherlands and meet the above requirements as well as the following, then you are just as eligible for a Dutch mortgage as a born and bred Nederlander. 

As always, it’s a bit easier if you’re from the EU. In this case, the NHG doesn’t discriminate based on nationality — just whether or not you are able to finance the loan.

“If you’re a non-EU citizen — including someone from Switzerland, Norway, Iceland and Liechtenstein — you will need a permanent residence permit,” Fred explains. 

However, it’s not end-game if you don’t have this. 

“You can also be eligible for a Dutch mortgage if you have an EU residence permit for long-term residents, or a document ‘Permanent Residence Permit for Citizens of the Union’, or a residence permit in the Netherlands for a purpose of stay that is not temporary within the meaning of Article 3.5 of the Aliens Decree.”

“For instance, being a highly-skilled migrant (so-called kennismigrant) is considered a non-temporary stay.”

Why should you opt for a mortgage with the NHG?

There are many reasons why you should consider taking out a National Mortgage Guarantee (NHG) as an international in the Netherlands. 

Firstly, lenders offer much lower interest rates if you opt for the NHG when sealing the deal on your Dutch mortgage. Lower interest rates mean lower monthly payments — leading to more money in your back pocket. 

On top of this, the 0.6% of the housing cost that goes towards the NHG is tax deductible. In this case, you’re not only getting back some of your money but also spending less each month due to lower interest rates.

In short, with the NHG your monthly mortgage costs will be lower, you’re protected in the worst-case scenario, and you can deduct the cost from the taxman!

Decided you want to get a mortgage with the NHG? Reach out to Expat Mortgages!

Fred and his team are the experts when it comes to calculating and securing mortgages for internationals in the Netherlands. 

Using their skills and good standing with lenders, Expat Mortgages will make sure the road to securing your ideal mortgage is smoothly paved. All you need to do is reach out and tell them about your Dutch home dreams.

Update 2024:

In 2024, the NHG is only available for house sale prices in the Netherlands that are a maximum of €435,000. This is an increase of €30,000 compared to 2023! This means that if you want to get an NHG mortgage on a house worth €435,000, but want to take measures to make it more sustainable, then the borrowing limit will be raised to €461,100.