Why buy rather than rent a home in the Netherlands? | I amsterdam (2024)

Buying versus renting in the Amsterdam Area

The tremendous demand to buy or invest in real estate intheAmsterdamAreahas earned the city the reputation of being a notorious destination where thedemanddoes not always meet supply.Rentinga home when relocating to a new country can be a short-term solution. However, when the time comes to settle down, you will most likely begin to consider whether it is preferable to rent or buy a home in the Netherlands.

Benefits of rentinga home in the Netherlands

Benefits of buyinga home in the Netherlands

Buying a home in the Netherlands

One of the most popular questions that newcomers ask is:‘Can I get a mortgage if I move to the Netherlands?’ Everyone who holds a BSN number can apply for a Dutch mortgage. You can alreadycheck how much mortgage you can affordand start looking for your dream home beforerelocatingto the Netherlands.

The following question is:‘When isitan excellent time to buy a home?’ Due to the increasing rental prices and decreasing interest rates, the housing market is continuously performing strong. Low-interest rates and existing housing shortageincreased the competition between homebuyers in the last decade. High demand and low supply push housing prices up in the Netherlands.

A Dutch mortgage has tangible financial advantages

If you buy a home and get a mortgage, you are entitled to a tax break derived by deducting your mortgage interest from your taxable income. In the Netherlands, mortgage interest rates are currentlymeagre, and in 2021 reached a historically lowof1.23%.

Besides, the Dutch government supports and makes housing more accessible to first-time homeowners. For example, asof1January2021, people aged 18-34 years old who buy their first property worth less than €400,000 will no longer pay the property transfer tax of 2%.In comparison,investors who plan to buy a property for rent pay 8% transfer tax.

Banksalso offerdiscount mortgages for homeowners whose dwellings meetspecificsustainability standards.

Maximum mortgage amount

A Dutch mortgage is based on the loan-to-income (LtI)ratio,and you can borrow 100%of theloan to income.The amount you can afford depends on your annual income and thevalue of a property.

To close a mortgage in the Netherlands, you need savings. Mortgage closing fees involve transfer tax of 2% (if applicable), real estate agent fee, notary fee, translator fee, valuation report, and mortgage brokerage fee.

Good toknow:there are more than 35 mortgage lenders in the Netherlands.Dutch mortgage advisers work with multiple mortgage lenders, while the banks only represent themselves.

Homeownerexpenses

As a homeowner, your annual expenseswill likely stay, if not stable, then predictable.Initial buyer’s costs aside, you can anticipate your annual costs, such as property taxes and insurance. Should repairs or renovations arise, you yourself sign off on them, rather than receive a surprise bill. While most landlords cover major repairs, renters are still often responsible for minor ones. And should you have a mortgage, you can fix and adjust interest payments, giving you more decision-making andasense of control over monthly expenditures than in a renter-landlord relationship.

Owninga home adds to yourcapital

Buying, rather than renting, in the Netherlandsprovidesmany international residents, just like their Dutchcounterparts, financialbenefits,and tax discounts. Onceyou’vesettledin and, usually within a fewyears,capitalisedon your buyer’s costs, anotherpayoffisthe comfortthat yourhome isall yoursto do whatever you want in and with.And illiquidthough it may be, a home is capital. Thismeans its investment can be put towards anotherfutureinvestment– be it a bigger family home, a future relocation, or other changing circ*mstances.

Need more advice about how to buy your first home in Amsterdam? Get in touch with Mister Mortgage.