Maximum mortgage based on housing value (Loan to Value - LTV)
The Dutch government has also issued rules determining what the maximum mortgage loan may be on the basis of the value of the home. Since 1 January 2018 the general limit has been 100%.
Deviation from the standard
The mortgage provider may deviate from the general limit in several situations:
- If a residual debt has arisen at the time of the sale of a home, this residual debt may be co-financed in a new mortgage loan.
- The costs of energy-saving facilities may be co-financed. In that case, the total mortgage loan may not exceed 106% of the housing value.
- In the case of refinancing, if the new mortgage loan does not exceed the previous mortgage loan plus the transfer costs.
- If the debt servicing rate of a mortgage loan is substantially lower than the maximum permitted financing burden.
- When paying arrears to the Homeowner association, if the arrears negatively affect the value of the property.
- If the risk of residual debt is eliminated by a municipal scheme for necessary home improvements.
- If there are provisions for necessary home improvement that lead to a decrease in the ratio between the amount of the total mortgage loan and the value of the home.