Wage increases will make higher mortgages possible next year: Nibud

Wage increases will mean that Netherlands residents will be able to borrow slightly more on a mortgage next year, according to the budgetary institute Nibud in its advice to the government on the mortgage standards for 2025.

The Bureau for Economic Policy Analysis (CPB) forecast an average wage increase of 4.3 percent for Dutch households in 2025. “A household that currently has an annual income of 70,000 euros will be able to borrow approximately 7,000 euros more in 2025 with the average wage increase,” Nibud director Arjan Vliegenhart said. “Without a wage increase, this household would be able to borrow 6,000 euros less than in 2024.”

The mortgage standards help banks and other lenders determine whether households can actually afford the mortgage they’re applying for. They’re intended to protect people from creating more debt than they can manage. “If people have too little money left over to make other necessary expenses due to high housing costs, financial problems are lurking,” Vliegenhart said.

Nibud, therefore, urges people not to borrow the maximum possible amount on their mortgage without careful consideration. “These are the maximum standards and that is just barely affordable. There is enough left for other necessary expenses, but a household will then have to make choices when it comes to less necessary costs. A holiday, for example.”