If you're planning to buy a home in the Netherlands, you may already be familiar with the Nationale Hypotheek Garantie (NHG). This government-backed mortgage guarantee offers protection to both lenders and borrowers, ensuring that in cases of financial hardship, such as job loss or disability, your mortgage can be managed responsibly without excessive financial burden. But NHG also sets a maximum property value for homes eligible for this guarantee, and these limits are adjusted annually.

What is NHG?

The Nationale Hypotheek Garantie (NHG) is a safety net for homebuyers. By taking out an NHG-backed mortgage, homeowners benefit from lower interest rates and are protected if they are forced to sell their home at a loss due to unforeseen circumstances. In exchange for this protection, buyers pay a one-time fee at the start of their mortgage, which amounts to 0.6% of the total mortgage sum in 2024.

NHG is popular because it offers financial security for homeowners, but the key limitation is the maximum purchase price of homes that qualify for NHG.

NHG Threshold for 2024

For 2024, the NHG mortgage limit has been set at €435,000. This is an increase from the previous limit in 2023 of €405,000. The threshold increase reflects the rising property prices in the Dutch housing market.

Additionally, if you are making energy-saving renovations to your home, the maximum NHG threshold can be extended further.

Expected NHG Threshold Changes for 2025

Looking ahead to 2025, the NHG limit is expected to rise further in response to continued increases in home prices across the Netherlands. While the exact threshold for 2025 has not yet been officially announced, industry experts and government officials anticipate that it could be adjusted to somewhere around €450,000 - €470,000. The continued rise would align with the general trend of rising property values, helping more homebuyers access the benefits of NHG despite higher home prices.

Should You Opt for NHG?

If you’re considering purchasing a home, opting for an NHG-backed mortgage can offer several advantages:

• Lower Monthly Payments: NHG mortgages usually come with lower interest rates compared to non-NHG mortgages. Over time, this can add up to significant savings.
• Security and Protection: If you find yourself in financial distress, NHG can offer a crucial safety net, protecting you from long-term financial damage.

However, it’s important to consider that NHG only applies to homes within the specified price range. If you’re looking to buy a more expensive property above the NHG limit, you won’t be eligible for this guarantee. Additionally, buyers must also meet certain income and affordability requirements set by their lender.

Conclusion

As property prices in the Netherlands continue to rise, the NHG limit has been adjusted upwards for 2024, offering homebuyers more flexibility when purchasing a home.

Looking ahead to 2025, further increases in the NHG limit are expected to accommodate rising home prices. This will provide more opportunities for homebuyers to access NHG-backed mortgages, although it’s crucial to stay informed about any changes in fees and conditions associated with the guarantee.

If you’re considering purchasing a home and want to understand whether NHG is the right choice for you, our team of mortgage experts can help guide you through the process. Contact us today to explore your options and secure a mortgage that best fits your financial situation.