Mortgage lending standards might tighten next year

Home buyers will probably not be able to borrow as much money next year when purchasing a house, AD reports. The National Institute for Budget Information (Nibud) will give advice to the Cabinet in October that will become the standard for mortgage calculations.

“It is expected that the lending standards will become stricter next year. Inflation means that you have less room for housing costs, so that makes sense," Marcel Warnaar of Nibud told AD.

Mortgage interest rates are currently on the rise, meaning that home buyers have higher monthly payments, Rabobank economist Nic Vrieselaar told AD. If energy prices and inflation remain high, mortgage lending standards should be tightened, he said.

“Many home buyers borrow maximum relative to their income, so they don't have a lot of room to put money aside every month. If the energy bill suddenly rises by hundreds of euros per month, they can get into financial difficulties more quickly," Vrieselaar said.

Although Nibud's advice usually becomes the standard, the Tweede Kamer could ignore it and keep lending standards the same. However, this would go against warnings from the government's chief financial advisor. The Dutch Central Bank has also supported stricter borrowing standards than Nibud has proposed in years past, according to AD.