More first-time buyers to qualify for government-backed mortgage guarantee in 2020

Sold sign in front of a home
Sold sign in front of a homePhoto: ArturVerkhovetskiy/DepositPhotos

The premium for the National Mortgage Guarantee (NHG) is decreasing from 0.9 percent to 0.7 percent of the total home-loan beginning next year, resulting in savings of up to 620 euros for eligible buyers. The maximum price for homes eligible for the NHG is also increasing, from 290 thousand euros this year to 310 thousand euros next year, Minister Kasja Ollongren of Home Affairs announced in a letter to parliament.

Homes with a price tag of up to 328,600 euros will also qualify for the scheme if they have modern energy-saving facilities.

The National Mortgage Guarantee is a type of insurance policy that covers mortgage debt if the homeowners are unable to pay for it. Banks often offer lower interest rates on mortgages if you take out a mortgage utilizing the NHG because of the lower risk involved.

Ollongren said one goal of the policy change is to bring more first-time home buyers into the real estate market. "These changes make the NHG cheaper and more accessible. Especially [first-time homeowners] in particular can benefit from these adjustments," she said in a statement. 

Mortgage interest rates in the Netherlands have fallen as low as 1.14 percent on ten-year loans, 1.68 percent on 20-year loans, and 2 percent on 30-year loans.

The NHG means mortgage payments are still made in a variety of unexpected situations. It covers homeowners who lose their jobs, or are unable to work, and also changes to relationships, like a break-up or the death of a partner.