Your mortgage payment in the Netherlands, gross and net

Kofi moved to Amsterdam two years ago and has had an offer accepted on a flat for €420,000. His lender quotes a monthly payment. What he wants to know is his real mortgage payment in the Netherlands once the Dutch tax effect is in. This page walks you through that sum in five steps, with Kofi's figures as the worked example.

You need five figures before you start: the loan amount, the interest rate, the term, the WOZ value of the home and your taxable income. The page covers a home you live in yourself, with an annuity mortgage taken out from 2013 onwards.

The rules behind each step have their own pages. Why the deduction works as it does is on mortgage interest deduction. How much you can borrow is not part of this sum either. A lender decides that based on your income. It is a question for mortgage advice.

How do you work out your gross mortgage payment?

You work it out from three figures: the loan, the interest rate and the term. This is the amount your lender collects and the starting point for everything below.

Step 1: write down the loan, the rate and the term. Kofi borrows €400,000 at an example rate of 3.8% over 30 years, so 360 months. The rate is an example to calculate with, not a quote. Use the rate in your own offer.

Step 2: calculate the gross monthly payment. Divide the rate by twelve for the monthly rate. The payment is the loan × monthly rate ÷ (1 − (1 + monthly rate) to the power of −360). In a spreadsheet the PMT function does the same sum. For Kofi that gives €1,864 a month, the same every month for 30 years. We round to whole euros at every step on this page.

Want to check the repayment part against the rules for the deduction? The Belastingdienst has its own helper for that, linked further down.⁵

How much of it can you deduct?

You deduct the interest you pay in the year, minus the eigenwoningforfait. Only the interest counts. The repayment part of your payment is not deductible. The deduction applies for at most 30 years. You also have to repay the loan at least on an annuity or linear basis.⁴

Step 3: work out the interest for the first year. For a first-year indication, multiply the loan by the rate: €400,000 × 3.8% = €15,200. The real figure is a little lower, because you repay part of the loan during the year. Your lender's annual statement gives the exact amount later.

Step 4: work out the eigenwoningforfait. Multiply the WOZ value by the percentage in the table below.³ Kofi's flat has no WOZ assessment in his name yet. He uses the purchase price as a stand-in: €420,000 × 0.35% = €1,470. His deductible balance is €15,200 − €1,470 = €13,730.

You deduct one-off costs for your loan separately, in the year you pay them. Think of advice fees and the notary costs for the mortgage deed. Those costs fall outside this monthly sum.

What is your net monthly payment?

Your net payment is the gross payment minus the tax effect of your deductible balance. The tax effect is that balance times your deduction rate.

Step 5: apply your deduction rate and take it off the gross payment. Look up where your taxable income falls in the table below.¹ Kofi's taxable income is €75,000. After his €13,730 deduction it is still above €38,883. The whole balance therefore falls in the second bracket at 37.56%. On an income above €78,426 the deduction is capped at the same 37.56%.² The sum:

• €13,730 × 37.56% = €5,157 a year.
• €5,157 ÷ 12 = €430 a month.
• €1,864 − €430 = €1,434 net a month in the first year.

This is an indication, not a final calculation. It rests on Kofi's assumptions: one borrower, a flat he lives in, an annuity mortgage, 2026 rates and the example interest rate.

What changes your result?

Five situations change your result. Each one changes a single step. Check the ones that apply to you before you rely on your figure.

• Your income falls in the first bracket. Is your taxable income at or below €38,883 before the deduction? Then use the first-bracket rate of 35.75%¹ in step 5. Does the deduction take you below that line? Then split the balance at €38,883. The part above the line gets 37.56%, the part below gets 35.75%.
• You have the 30% ruling. Part of your salary is then untaxed, so your taxable income is lower than your gross salary. Check your bracket in step 5 against your taxable income. How the ruling works is on the 30% ruling.
• Your eigenwoningforfait is higher than your interest. Then there is nothing to deduct. A separate rule decides how much of the difference counts. Read that rule³ on eigenwoningforfait.
• You repay too slowly, or the loan is over 30 years old. The interest on that part is then not deductible⁴, so leave it out of step 3.
• You buy with a partner. You and your fiscal partner can divide the deduction and the eigenwoningforfait between you. The split decides whose bracket applies. How that works is on fiscal partnership.

A second home, such as a holiday home, is not one of these five. It falls in Box 3, the tax box for savings and investments. The loan on it adds nothing to your deduction.⁷

What do you do with your figure?

Test your budget with it, then have the tax and the mortgage checked. This is general information, not personal advice.

• Get the tax effect paid monthly. You do not have to wait for your tax return. With a provisional assessment the Belastingdienst pays the deduction back each month.⁸ Read how we arrange that for you on provisional assessment.
• Have the mortgage itself looked at. Whether Kofi's €400,000 loan fits his income is a lending question, not a tax one. You can borrow up to 100% of the home's value. The law sets the income limit each year.⁶ Buying your first home here? Start with first-time buyer mortgage. Moving an existing loan instead? Read refinancing your mortgage.
• Revisit the sum when something moves. A new rate, a raise, a partner or a new WOZ value changes steps 2 to 5. Run them again with the new figure.