More Dutch parents raise mortgages to help children buy homes, widening wealth divide
A growing number of parents in the Netherlands are raising their existing mortgages to help their children purchase a home, according to mortgage advisers from De Hypotheekshop. The trend is widening the gap between first-time buyers whose families can offer financial support and those who must rely solely on their own income, RTL reports.
“In some cases, families are coordinating with multiple relatives to free up capital by increasing their mortgages, all with the goal of helping a child compete in the overheated housing market,” Martin Hagedoorn of De Hypotheekshop told RTL.
Data from the Hypotheken Data Netwerk, which collects sales figures from most Dutch mortgage lenders, show that this practice is growing rapidly. In 2020, only 16 percent of mortgage applications fell into the “other” category, consisting almost entirely of mortgage increases. By this year, that share has more than doubled to 34 percent.
There are various reasons why people choose to increase their mortgage, such as funding home renovations or improving energy efficiency. However, a survey by RTL Nieuws among lenders, real estate agents and banks found that parents are using the extra funds more frequently to help their children buy a house.
According to mortgage adviser Randy Rietdijk, parental assistance has become a standard topic in discussions with first-time buyers. “With starters, we look at the budget, what someone is searching for and where, and then we make a plan,” he told RTL. “Often there are three options for starters who want to buy in a popular region: help from family, waiting until you earn more, or moving to another area.”
Especially in the Randstad region and cities such as Haarlem, Amersfoort, Amsterdam and Utrecht, it has become nearly impossible to buy a home without family assistance. Many prospective buyers have already abandoned their search out of discouragement.
The growing reliance on parental wealth is fueling inequality in the housing market, according to Wouter van Gent, a social geographer at the Universiteit van Amsterdam. “In the Netherlands, it increasingly depends on who your parents are,” Van Gent told RTL. “You see that the way people obtain a home is changing and that family capital is becoming more important.”
Hagedoorn said that first-time buyers without parental help often struggle to compete with peers who receive a gift or loan. “That difference is often decisive in whether you can buy a home or not,” he told RTL. “And the wave of rental property sales has also made it harder to find a place to rent. That means you start your life later.”
Beyond increasing inequality, Van Gent noted that financial support from parents has a broader impact on the market. “It can push prices even higher,” he told RTL. “At the moment people can borrow more because they can also borrow from their parents, prices just keep going up.”
Still, Van Gent emphasized he understands why families step in. “We have a housing market crisis, and it is very difficult for young people to find a home,” he told RTL. “Naturally, you try to find a solution.”
