When buying a home in the Netherlands, you will come across the National Mortgage Guarantee (NHG) – a safeguard that can provide peace of mind to homeowners and buyers alike. It serves as a safety net when you cannot pay your mortgage costs. The NHG provides mortgage lenders with more security, which translates into lower interest rates.
What is the National Mortgage Guarentee (NHG)?
The NHG, or Nationale Hypotheek Garantie in Dutch, is a government-backed guarantee designed to protect both lenders and borrowers in the Netherlands. It was established to promote responsible homeownership by reducing financial risk and making it easier for individuals and families to purchase a home.
How does NHG work?
NHG protects lenders from financial losses in the event that a borrower is unable to meet their mortgage payments and the property must be sold at a loss. This protection encourages lenders to offer mortgages at more favorable terms, including lower interest rates. These lower interest rates can mean significant long=term savings on your mortgage.
Who qualifies for NHG?
Each year, the maximum mortgage amount eligible for NHG is updated. As of 2023, the NHG limit is €405.000. The purchase price or appraisal value of your home shouldn’t exceed this limit. Purchasing a house above this limit is possible, if there are sufficient funds available to bridge the gap.
In addition to this, there are a few other requirements to make use of the NHG.
- The home that you are buying should be your primary residence;
- You should either have a fixed contract, or have a letter of intent from your employer when applying for a NHG mortgage.;
- Do you want to loan money to remodel your home? Then your current mortgage should be lower than the market value of your home before remodelling.
Applying for NHG
Applying for the NHG, typically happens through your mortgage advisor when applying for a mortgage. The mortgage advisor will assess your eligibility and help you with the necessary paperwork. They will help smoothen the process and increase your chances on a succesful application. Keep in mind that there is a one-time fee associated with NHG, which is a percentage of the mortgage amount but can ultimately be worthwile given the potential cost savings. Currently, the one-time fee is set at 0.6% of the total mortgage amount.
In conclusion, the National Mortgage Gurantee is a valuable resource for expats. It offers financial security, and lower interest rates, makeing homeownership more accessible and less risky. However, the NGH limits and requirements are subject to change. At Brickle Mortgages, we can help you navigate the complexity of the Dutch mortgage market and make the most of the NHG benefits. Our mortgage advisors are happy to help you with all the necessary paperwork to increase your chances of a succesful application.