How Much Deposit Do I Need for an Expat Mortgage?
One of the most common questions expats ask when considering buying a home in the Netherlands is: how much deposit do I need? The answer depends on your nationality, residency status, and the lender you choose.
Maximum Loan to Value: generally 100%
In the Netherlands, the maximum Loan to Value (LTV) ratio is 100% of the property's market value. This means you can potentially borrow the full purchase price. If you invest in energy-efficient improvements (such as solar panels or insulation), you can even borrow up to 106% of the market value.
This is a significant advantage compared to many other countries where deposits of 10% to 20% are standard. However, even at 100% LTV, you will still need savings for the transaction costs (known as "kosten koper"), which are not covered by the mortgage.
Non-EU nationals: possible 80% maximum
If you are a non-EU national, some lenders may restrict your maximum LTV to 80%. This means you would need to bring at least 20% of the property's value as a deposit, plus the transaction costs. The exact restriction depends on factors such as:
- Your type of residence permit
- How long you have lived in the Netherlands
- Your employment situation
- The specific lender's policies
Not all lenders apply these restrictions equally, which is why working with an experienced advisor is crucial. Some lenders are far more flexible than others when it comes to expat mortgages.
Property valuation is required
Regardless of your LTV, a property valuation (taxatie) is required for every mortgage application. An independent appraiser assesses the market value of the property, and the mortgage amount is based on this valuation, not the purchase price. If the valuation comes in lower than your purchase price, you may need additional savings to cover the difference.
The 10% notary deposit
When you sign the purchase agreement (koopovereenkomst), you are typically required to provide a 10% deposit (waarborgsom) to the notary as a guarantee. This is not an additional cost but rather a security deposit that is applied to the purchase price at completion.
Bank guarantee as an alternative
If you do not have 10% of the purchase price available in cash, you can arrange a bank guarantee (bankgarantie) through your mortgage lender. The bank guarantee serves as a promise that the 10% will be paid if you default on the purchase. This typically costs around 1% of the guarantee amount and is a common solution for buyers who prefer to keep their savings liquid.
Conclusion
Most expats in the Netherlands can borrow up to 100% of a property's market value, making it possible to buy with minimal savings. Non-EU nationals may face additional restrictions, but options are available. The key is to budget for transaction costs and the 10% notary deposit or bank guarantee. Contact us for a personalized assessment of your deposit requirements.
