Buy to let mortgage in the Netherlands
Are you interested in renting out your house in the Netherlands? A buy to let mortgage or investment mortgage allows you to finance a property you want to rent out. For example, if you have bought a new property but want to keep your current home to rent out. You can also buy a second home specifically to rent out. So buying a house and renting it out can be done with this form of mortgage. How exactly does a rental mortgage work? We will be happy to tell you more about it.
What is a buy to let mortgage?
A buy to let mortgage, also called an investment mortgage by some mortgage lenders, is different from an equity-linked mortgage. With an equity-linked mortgagee, you build up capital through investments to repay your mortgage. A buy to let mortgage is a mortgage for an investment property. You get income from renting out a house and hope for an increase in the property's value.
Which mortgage provider allows lettings?
Through De Hypotheker, you can take out a landlord mortgage from several providers, such as:
- Nationale Nederlanden buy to let mortgage
- Woonfonds buy to let mortgage
- ABN AMRO buy to letl mortgage
- NIBC buy to let mortgage
What are the conditions for a investmortgage?
There are no set rules for letting your home with a mortgage. Mortgage lenders each have their own conditions for taking out a rental mortgage. For example, you are often allowed to finance up to a maximum of 70 or 75 per cent of the market value in let condition and there is a maximum amount to borrow.
Buy to let mortgage interest rate
You pay more mortgage interest for a property you rent out than for a property you live in yourself, because of the higher risk the mortgage lender has with a rented property.
So an investment mortgage usually has a higher interest rate. However, there are often other advantageous terms and conditions. For instance, you are usually allowed to realise 50% of the home financing through a no-repayment mortgage. This makes for relatively low monthly costs.
How much of your own capital do you have to bring in?
With most mortgage lenders, you can borrow up to 80% of the market value that the property has when let. Sometimes it is 70% or 90%. So you will always have to bring in an amount yourself. The more money you put in, the less you will have to borrow. So your costs are lower and you keep more return on the rental income.
The risks of a buy to let mortgage
The biggest risk with a buy to let mortgage is that your rental income can drop away, while you still have to pay the monthly mortgage charges. For this reason, mortgage lenders also always look at the business case you provide on letting. Your own personal situation is less important with this type of mortgage.
Is there expected to be enough money coming in through the letting to pay the mortgage? That is the big question for the mortgage lender. If your rental income drops away you will have to pay the monthly costs out of your own pocket.
In addition, you run the risk that the property's value will decrease and you will end up with a residual debt. Finally, interest rates may also rise, resulting in higher monthly costs.
Do you invest in real estate professionally or privately?
Most private mortgage lenders do not mind giving you a rental mortgage if you own five properties at most. If there are more, your financing must come from the corporate market. Some banks have a rule of thumb that you cannot exceed a certain amount of rental income to still be considered a private investor.
At De Hypotheker, we exclusively advise consumers who want to buy one or a few properties for rental purposes. For example, to help a studying child find living space. Professional investors cannot finance their properties through De Hypotheker.
Calculating a buy to let mortgage is tailor-made
We understand that you would like to calculate your maximum investment mortgage. Unfortunately that is not possible online because each situation is unique. That is why we ask you to visit one of our branches. There, we will look at your unique situation together and can make a calculation.
Mortgage transfer or rental mortgage application?
Do you want to switch your mortgage to a rental mortgage or apply for a new mortgage? De Hypotheker is happy to work with you and help you match your mortgage to your current situation. Our mortgage broker can do the following for you:
- We request quotes, answer questions from lenders and insurers for you and make sure everything is arranged on time.
- We will help you arrange the valuation by an estate agent and the completion of the mortgage at the notary.
- At De Hypotheker, you can choose from almost all mortgage lenders and insurers.
So you can confidently choose the most competitive offer that fits your situation exactly. Book your appointment with one our mortgage brokers today.