First-time home buyers could soon get cheap €75,000 loans to make buying easier

First-time home buyers who cannot afford to buy a home will soon be able to receive a low- or no-interest loan from the government to help finance the purchase of a newly built home. The coalition parties supported a CDA bill to allocate 40 million euros to the National Fund for Affordable Homes, AD reports.

First-time home buyers with an annual income between 40,000 and 65,000 euros can get up to 75,000 euros from the fund to help purchase a newly-built home. They’ll only have to repay this loan when the home is sold again, plus part of any profit they make. If the property unexpectedly decreases in value, the amount to be repaid may be lowered.

According to CDA parliamentarian Jaco Geurts, the current high house prices and rising mortgage rates make it impossible for middle-income people to buy a house, making them dependent on expensive rentals. This fund should help with that.

The OpMaat foundation launched the fund last week, according to the newspaper. The foundation asked the Cabinet to contribute 82 million euros to help first-time buyers fund the purchase of up to 5,000 newly built homes by 2030. The coalition agreed to contribute about half the requested amount.

Nic Vrieselaar, a senior economist at Rabobank, called it great that the government wants to help young people enter the housing market. But he fears that this fund will only increase home prices further. “If successful, such a fund means that even more people will look for a home for sale. That means home seekers will face even more competition, which contributes to even higher house prices,” he said on LinkedIn.

“If we find that houses have become too expensive for young adults, then isn’t the only structural solution that houses have to become cheaper?” Vrieselaar asked. “Unfortunately, OpMaat aims to do the opposite: keep house prices high (and maybe even push them up further) by letting young home buyers take on an extra debt on top of a mortgage. That is a boost for homeowners and real estate investors, but not for first-time buyers.”