MortgageMonster.nl is a 100% independent, professional & reliable mortgage advice site for expats who want to buy a house in the Netherlands. Their experts will help you find the perfect mortgage against the best possible rate.
Renting or buying?
Whether you have come to the Netherlands because you got a job offer or you relocated here, you will need to find some living space and a rental property is the most common option.
The search for a property that matches your needs and wishes can easily take several months or maybe even longer than a year, and then you still need to wait 2-3 months before you receive the keys to your new place.
And if life in the Netherlands suits you and your family, moving to a new home which will, in fact, be yours, is much more appealing. You will not face an increase of rent (again), and you will no longer have to deal with the bad wallpaper and floor tiles that have annoyed since you first moved in.
Instead, when you come home you walk through your own front door, relax on the couch in your living room with nice wooden flooring, and the off-white stucco wall makes you smile.
Whilst rent increases each year, the current interest rates on a mortgage are extremely low. And that means that your monthly repayments are low as well. Given that rent increases each year and monthly mortgage repayments will remain pretty much the same, it seems like the mortgage repayments win the battle when it comes to costs.
Also, renting in the Netherlands is not cheap and depending on where you are, you could be worse off financially in a rental property. A three-room flat in Amsterdam’s Buitenveldert district will cost you around 1.900 euros per month in rent.
However, if you were to buy the exact same property, it could be as much as 700 euros per month cheaper - and that is taking all the bills into account as well.
How do you decide?
Buying a house has its advantages compared to renting a house, but it has some downsides as well. It is important to find out what you feel the most comfortable with and if it is practical and financially attractive to move forward.
If you foresee yourself moving to a different country, two years from now, buying a house is probably not the best idea. Not only do you have to invest some of your own money, you need to sell the house as well because renting out the property is (most of the time) not allowed by many mortgage providers. Renting out when you are abroad for a short while may be possible. If this scenario is likely, be sure to consult your mortgage advisor about it.
But financially speaking, buying a house may be of interest to you. One of the most important factors is the low-interest rate at the moment. This means that the monthly repayments are lower as well. This can save you hundreds of euros per month, especially considering that rental prices will increase each year, and your mortgage repayments will pretty much stay the same.
Are there only advantages when you buy a house? No, of course, there are downsides as well. Think about the risk of value loss (your total mortgage is higher than the market value of the house) and that you are solely responsible for maintenance. So, make sure you know the pros and cons and are well aware of the risks.
The pros and cons of renting a house
To help you out and get started, we have already made a handy list of the pros and cons of buying versus renting. Here are the pros and cons of renting a house in the Netherlands:
The pros:
- You can terminate your rental agreement at any time
- The landlord is responsible for maintenance and insurance
- You have a high level of rent protection
- You don’t have to pay property tax
- You don’t have to worry about losing money when house prices drop
The cons:
- Rental prices are high and increase each year (sometimes even up to 10%)
- Limited choice/ supply
- The option to renovate the house yourself is very limited or non-existent
- When you move, you may have to return the property to its original state
- You won’t build equity with your monthly payments
- You won’t be making money when the property value rises
The pros and cons of buying a house
Here are the pros and cons of buying a house in the Netherlands:
The pros:
- Your mortgage and other housing costs are often less expensive than renting
- Mortgage interest and one-time costs of closing a mortgage are tax deductible
- You build equity by making monthly repayments and the property will become yours once the mortgage has been repaid
- You can find a home that matches your wishes (location, architecture, building type)
- You can renovate the property however you want
The cons:
- Your monthly repayments might go up when your interest rate period has ended
- You will be solely responsible for maintenance and repairs
- You may lose equity if the property declines in value
- You have to pay property tax and other communal taxes
- You probably need insurance (not applicable when buying an apartment, instead you are member of the owner’s association and pay a monthly fee)
For more on the pros and cons of buying a home, check out the renting versus buying section on MortgageMonster.nl, where you can also calculate your maximum mortgage.