As usual, the rules for obtaining a mortgage change a little every year. That is naturally the case this year too. It is therefore important to know what is changing if you are looking for a new home.
These changes are important for those who were unable to buy a home in 2021 because they were unable to obtain a mortgage!
Perhaps your income was too low, the bank thought your income was not stable enough, or you had insufficient savings, which meant you were unable to buy a home. As of 1 January 2022, numerous changes were implemented that mean you may now qualify for a mortgage and be able to buy your own home.
Changes to transfer tax rates
In 2021, the rule came into effect that buyers aged 18 to 35 years receive a one-off exemption from paying transfer tax when buying a home. The home may not cost more than €400,000. That saves thousands of euros on the buyer’s costs!
Buyers aged 35 years or older who are going to live in the home pay 2%. Investors, as well as parents buying for children who are studying, pay 8 % transfer tax. The government wants to give first time buyers and those moving up the property ladder more opportunities on the housing market.
Student debt weighs less heavily
Since 2021, student loans weigh less heavily in calculating the maximum mortgage. The weighting factor depends on the average interest on the student loan over the last 5 years, rather than a fixed percentage.
For two-income households, the 2nd income will count for more.
Since 2021, up to 90% of the lowest income can count towards the calculation of the maximum mortgage for two-income households. In 2020, only 80% of the lowest income could go towards calculating the maximum mortgage. This means the difference in the maximum mortgage can amount to thousands of euros!
Mortgage interest was low in 2021 and is expected to remain low for 2022. Many people are therefore opting to fix interest rates for a long time so they have certainty about monthly costs in future too!
However, inflation rose sharply in 2021. This could have a temporary effect. But if inflation continues to rise, so will pressure on the ECB to ease its stimulus measures.
NHG mortgages are cheaper and higher.
A mortgage from NHG (Nationale Hypotheek Garantie) offers extra security for you and for the bank. If you can no longer afford mortgage payments due to job loss or divorce, for example, the outstanding debt can be waived in the event of a forced sale. That is good for you and also gives you a financial advantage because, as it happens, you get the lowest interest rate on your mortgage. The cost to secure an NHG mortgage is a one-off payment of 0.6% of the mortgage amount; this cost is tax deductible. That was 0,7% in 2021.
The NHG cost limit is linked to the average house price. As of 1 January 2022, the cost limit is € 355,000, it was € 325,000 in 2021.
If you are willing to co-finance energy-saving measures, the cost limit is as much as 6% higher, namely € 376,300.
Homeowners’ Association act
The homeowners’ association act (“Wet verbetering functioneren vereniging van eigenaars”) was introduced in 2018. This should lead to financially healthier homeowners’ associations and better property maintenance. It has been mandatory for homeowners’ associations to have a reserve fund in place since 1 January 2021.
Objective of the legislation
A quarter of homes in the Netherlands are apartments. 1.2 million apartments belong to 121,000 homeowners’ associations. However, research showed that a third of homeowners’ associations function poorly to moderately. They are not registered with the Chamber of Commerce, have inadequate reserves, or no maintenance plan. That leads to property falling into a state of disrepair. Apart from the maintenance aspect, sustainability also plays a role. The Netherlands is a participating party in the European Energy treaty and must thus implement legislation that promotes (investment in) green energy.
Changes since 2018
Homeowners’ associations were already required to have a reserve fund in the past, but the law did not specify how much should be reserved. A homeowners’ association with nothing in the reserve fund was still technically compliant with the law. Since the start of 2018, it has been mandatory for homeowners’ associations to reserve 0.5 percent of the rebuild value every year, or to reserve on the basis of the MJOP, the multi-annual maintenance plan. The latter is the legislator’s preference. More and more banks will only grant a mortgage if there is an active homeowners’ association.
Bear this in mind if you plan to buy an apartment, or take professional advice.
Are there any other requirements if the reserve fund is based on the MJOP?
Yes, the MJOP must include a substantive cost calculation. The duration of the MJOP must be at least ten years and the MJOP may not be more than five years old. This guarantees that the reserve fund always corresponds to the actual maintenance required.
Households that will earn more next year can obtain a higher mortgage in 2022. Conversely, households that will remain on the same income will be able to borrow less because of increased inflation.
If you are planning to buy a house this year, then it is wise to first make an appointment with a mortgage adviser. They can provide you with the advice you need. Mevrouw de Aankoopmakelaar works together various mortgage advisers with whom we will organise an obligation-free appointment.