If you want to buy a property in the Netherlands, in many cases, you need to obtain a mortgage to finance your future property

Every mortgage comes with an interest rate — the amount you pay to your lender for borrowing money. While it may seem like a small detail, the interest rate has a major impact on both your monthly payments and the total cost of your mortgage.

A lower rate means you pay less each month and over the full term. A higher rate results in larger monthly payments and higher overall costs.

But that’s not all — the type of interest rate you choose also has a big impact on what your monthly mortgage payments will look like.

The fixed mortgage interest rate (vaste rente) is one of the most common choices among homebuyers in the Netherlands. This option allows you to lock in your interest rate for a fixed period of time — for example, 1, 5, 10, 20, or even 30 years.

What are the advantages of a fixed interest rate?

• Stable monthly mortgage payments: with a fixed interest rate, your monthly payments stay the same during the fixed period. This helps you plan your budget easily and avoid unexpected costs, making it simpler to manage your finances.

• Protects from interest rate increase: with a fixed interest rate, your mortgage rate does not change, even if mortgage interest rates go up. This keeps your monthly payments steady and helps you avoid any surprises.

  What are the disadvantages of a fixed interest rate?

• Higher rates: fixed interest rates often start slightly higher than variable rates. This is because you’re paying for the stability and long-term protection that a fixed rate provides. While your payments stay the same, you might miss out on lower rates if the market interest rate goes down.

• Limited flexibility: with a fixed interest rate, you are locked into the same rate for the entire fixed period. If market interest rates drop during that time, you won’t benefit from the lower rates. The only way to take advantage of falling rates is to refinance your mortgage, which often comes with extra costs or penalties.

A variable interest rate (variabele rent) can be a smart choice for homebuyers who expect rates to fall or plan to sell or refinance within a few years. It’s also the second most popular type of mortgage interest rate in the Netherlands.

Variable interest rates fluctuate over time based on market conditions. Key factors that can influence a variable interest rate: inflation, lender policies, and decisions made by the European Central Bank (ECB).

What are the advantages of a variable interest rate?

• Lower monthly payments: variable interest rates often begin at a lower level than fixed rates. This means your monthly mortgage payments can be smaller at the start, saving you money upfront. Because the mortgage interest rate can change over time, lenders usually offer a lower starting rate to attract borrowers willing to accept some risk.

• Lower payments overall: with a variable interest rate, your mortgage rate adjusts based on market conditions. If overall interest rates in the market go down, your rate may decrease too—meaning your monthly payments could become lower over time. This gives you the chance to benefit from favorable market trends without needing to refinance.

What are the disadvantages of a variable interest rate?

• Financial uncertainty: your monthly mortgage payments can rise if market interest rates increase, which may lead to budgeting challenges and financial stress.

• Financial risk: If the market becomes volatile, your mortgage payments may become higher over time.

The interest-only mortgage is one of the least popular options among homebuyers. With this mortgage type, you pay only the interest each month and do not repay the loan principal until the end of the term.

This leads to lower monthly payments but means you don’t build equity in your home during the mortgage period. Interest-only mortgages can be suitable for buyers planning to sell or refinance before the loan ends, but you must be ready to repay the full loan amount later. While this option offers lower initial costs, it carries risks such as higher payments after the interest-only period and limited tax benefits in the Netherlands. Do you want to learn more about this mortgage type? Feel free to contact us today.

Yes, it’s possible to combine both fixed and variable interest rates in a single mortgage. This type of structure can offer flexibility and balance between stability and potential savings. However, combining interest types can affect your overall mortgage options. For more details and to understand whether it suits your financial situation, please contact our team.

If you value stability and want consistent monthly payments, a fixed interest rate offers long-term predictability. On the other hand, if you are open to some flexibility and want to benefit from potential rate drops, a variable interest rate—or even a mixed mortgage—could be a better fit. It’s also important to consider whether current market rates are high or low, and how long you want to lock in your rate. Our mortgage advisors can help you to compare all options.