Mortgage interest rate deductions: 2026 outlook

The Dutch mortgage system is unique and offers homeowners several money-saving benefits. One big advantage is the mortgage interest deduction (hypotheekrenteaftrek). This means you can subtract the interest you pay on your home loan from your income when you pay taxes.

How do interest rate deductions work?

The mortgage interest deduction allows homeowners to deduct the interest portion of their mortgage payments for their main home from their taxable income in Box 1. This reduces the amount of income tax you owe, lowering your net monthly housing costs — often saving around 37.48% of your mortgage interest in 2025.

It applies only if your mortgage:

• Is used for buying, improving, or maintaining your main residence (eigen woning),

• Is repayment-based (annuity or linear), and

• Will be fully repaid within 30 years.

Why was the interest rate deduction introduced?

The Dutch government started this rule many years ago to make it easier for people to buy their own homes. It helps homeowners save money on taxes, so owning a house becomes more affordable.

However, the interest rate deductions cost the government a significant amount of money because they collect less tax, and they primarily benefit people who earn more. That’s why political parties often argue about it.

As of 2025, there are no plans to stop the rule, but some parties want to slowly reduce it in the future. Others want to maintain the status quo to help people afford their homes.

For now, the mortgage interest deduction remains an important part of the Dutch tax system, but it may change in the coming years.

How does interest deductions work

1. Determine the annual mortgage interest paid on your primary residence.

2. Add the notional rental value (eigenwoningforfait) to your taxable income.

3. This is generally 0.5% of your home’s WOZ value (official property value).

4. Subtract your mortgage interest paid from your income.

5. The result is your taxable income after the mortgage deduction.

This process is automatically handled by the Dutch Tax Authority (Belastingdienst) when you file your annual income tax return — though you can check or adjust the figures manually.

When can you expect to receive tax deductions?

• Annual refund: when you file your annual tax return (usually in March–April of the following year), the Tax Authority automatically processes the mortgage interest deduction. You don’t have to apply separately — it’s handled automatically based on the data provided by your mortgage lender and tax records.

• Monthly refund (voorlopige teruggave)

  if you prefer not to wait until next year, you can request a provisional tax refund from the Belastingdienst. This allows you to receive your estimated tax benefit in monthly installments, usually deposited around the 15th of each month.

It is important to update your provisional refund if your mortgage, income, or interest rate changes — otherwise, you might have to repay part of it later.

The 30-year limit and what happens in 2031

Since 2001, the Netherlands has applied a maximum of 30 years for claiming the mortgage interest deduction. This means that for homeowners who bought their homes in or before 2001, the right to deduction will expire in 2031. Once this ends

• You no longer receive a tax benefit for mortgage interest.

• You continue to pay mortgage interest, but without any tax relief.