Mortgage for properties abroad

The key points in short

A mortgage for a property abroad is not unusual, but it's still wise to get advice from an independent mortgage adviser. There are some extra conditions involved, especially if you choose to take out the mortgage in the country where the property is located.

1. Equity or personal capital

When taking out a mortgage for a property abroad, it's important to have equity in your current main residence in the Netherlands, or to have personal capital available. A second property abroad carries considerably more risk than a first home in the Netherlands, so the bank will ask for a larger personal contribution.

The equity in your current home is generally an excellent source of capital, as it means you don't have to use your savings. One common way to use equity for a new property is through an Opeethypotheek (equity release mortgage).

The more personal capital you can contribute, the greater the chance that the mortgage for the holiday home will be approved. With the mortgage for a recreational property, you can easily calculate what you can borrow for a holiday or second home. Read more here about taking out a second mortgage on a holiday home!

2. Mortgage abroad

Even if you take out the mortgage for a foreign property in that country, you will still need to bring in personal capital. Abroad, providers generally require a relatively large personal contribution, which can run up to 20% of the purchase price.

On top of that, mortgage terms abroad tend to be considerably shorter than in the Netherlands. That means you'll pay off the mortgage faster, and your total monthly costs (interest plus repayment) will be higher.

3. Key elements to consider

When taking out a mortgage for a foreign property in the destination country, make sure to pay close attention to the following elements:

• Local rules and regulations relating to mortgages
• Any costs for translating the mortgage agreement
• Costs for an independent local expert
• Specific conditions set by mortgage providers in that country
• Local estate agent fees
• Taxes in the destination country

These elements deserve some extra attention, so you know exactly what you're getting into. A mortgage for a property abroad works somewhat differently from your first mortgage in the Netherlands, which is why it's worth giving this some extra consideration.

Frequently asked questions

How can I finance a property abroad?

You can take out a second mortgage to finance a property abroad, but you'll need personal capital or equity in your main residence to do so.

Can I get a mortgage abroad?

It's also possible to get a mortgage in a foreign country, but you need to pay close attention to local conditions, and you'll often need a substantial amount of personal capital.

Can I deduct the interest on a second mortgage from my taxes?

It is not possible to deduct the interest on a second mortgage from your taxes.