New Mortgage Rules: Boost Your Borrowing Power with Energy Labels

Starting in 2024, the mortgage landscape in the Netherlands is shifting, offering homebuyers more flexibility based on their property’s energy efficiency. Traditionally, you could borrow up to 100% of your property’s value, depending on your income, home value, and mortgage interest rates. However, new government guidelines allow you to borrow even more if your home is energy-efficient. These changes, recommended by the National Institute for Family Finance Information (Nibud), are set to impact anyone looking to buy or refinance a home significantly.

How Energy Labels Impact Your Mortgage

Starting in 2024, your maximum mortgage amount will factor in your home’s energy label, together with your income, property value, and interest rate. This update ensures that your mortgage matches your financial capacity by considering potential savings on energy bills from a more efficient home.

For example, with an energy label C or D, you might qualify for an additional €5,000 on your mortgage. However, if your home boasts an A++++ rating and has an energy performance guarantee for at least ten years, your borrowing capacity could increase by up to €50,000. This change incentivizes homeowners to invest in energy-saving upgrades, as it directly influences their mortgage potential.

The Importance of Energy Labels

Energy labels rank homes based on their energy efficiency, from A (most efficient) to G (least efficient). Homes with better energy labels are more attractive to buyers due to lower heating and cooling costs. With the new mortgage rules, a better energy label means you can get a larger mortgage.

In Amsterdam, energy label A is already widespread, with over 127,000 homes achieving this rating. However, many historic homes, such as those in the Canal Belt, often have lower ratings like label G due to their age and architectural limitations. As a result, buyer preferences may shift, making energy efficiency a key factor in determining a home’s value and appeal.

Mortgage Interest Rates and Borrowing Percentages

This year, many lenders have lowered their interest rates, making it easier for homebuyers. About one-third of these rate cuts apply to short-term and long-term fixed rates, usually dropping by 0.05% to 0.10%. When you combine these lower rates with the chance to borrow more if your home has a better energy label, now could be a great time to buy or refinance a home.

Buying a Home in Amsterdam? Consider Looking Outside the Ring

If you’re looking to buy a home in Amsterdam and need to maximize your mortgage capacity, we advise you to explore areas outside the A10 Ring Road. Homes within the ring are highly desirable but are often older and less energy-efficient, making it harder to achieve a high-energy label. By expanding your search to areas outside the ring, you may find newer or more energy-efficient properties, allowing you to qualify for a larger mortgage under the new rules. This strategy could be crucial in securing the home you want with the financial flexibility you need.

 What This Means for You

If you’re planning to buy a home or refinance your mortgage, it’s essential to consider your property’s energy label. While energy-efficient upgrades might require an initial investment, they can significantly increase your borrowing capacity and reduce your long-term expenses.

Conclusion

The new mortgage rules in the Netherlands strongly emphasise energy efficiency, making it a key factor in home buying. Starting in 2024, homes with better energy labels will enable buyers to borrow more, increasing the appeal of energy-efficient properties. If you’re targeting the Amsterdam market, expanding your search beyond the A10 Ring Road could help you find a home that aligns with these new guidelines, maximizing your borrowing power and opening up more opportunities in your home search.

By understanding and taking advantage of these changes, you will make smart decisions that improve your quality of life and financial stability. If you need help finding a mortgage advisor, real estate agent, or energy label expert, email us at monique@howtobuya.house. We’ll connect you with a trusted professional to assist you.