Sustainability, remodelling, and your mortgage in the Netherlands

Let’s be real, sustainability might not be the first thing that comes to mind when you’re trying to sort your mortgage in the Netherlands.

But, it’s a super important thing to consider before agreeing to the terms of your mortgage — and even after! 

Why? Because there are a number of ways that you can use your mortgage to help fund sustainable remodelling and renovations on your Dutch home. After all, shouldn’t we be rewarded for implementing energy-saving measures? 🌳

Sustainable remodelling: a growing trend in the Netherlands

With the issue of climate change at the forefront of many people’s minds — and inflation sending energy prices through the roof — many homeowners in the Netherlands are not only looking into remodelling their homes but also making them more sustainable.

In fact, the past few years have seen the interest in sustainably refurbishing homes skyrocket. As of May 2023, no fewer than 83% of homeowners in the Netherlands have either made their homes more sustainable in the past two years or plan on doing so in the next two years.

In fact, from January 1 2024, you are also able to borrow more based on the home’s energy label.

For example, those looking to mortgage a home with an energy label of C or D may be able to borrow €5,000 extra, and those looking at zero-metre homes? Up to a whopping €50,000 extra.

However, it’s not just the houses with higher energy labels that will benefit.

From 2024, those looking to buy houses with a lower energy label (E, F or G) can borrow more in order to finance sustainable renovations. This amount can vary between €10,000 and €20,000.

So, what exactly is it that you should do with your mortgage in order to help make this possible? Let’s talk about it.

New home? Here’s how you can use your mortgage to make it more sustainable 

Ok, you’re about to get a Dutch mortgage — congrats! Let’s run through all the steps you can take in order to fund any sustainable renovations that you plan on doing in the future.   

First things first, talk to your mortgage advisor

Mira suggests that the first thing you do is sit down with your mortgage advisor and discuss exactly what it is you want to do to make your home more sustainable. Based on the valuation of your home and the terms of the mortgage, your advisor will point you towards two different options. 

Option one: Set up a bouwdepot 

One thing you can do is talk to your mortgage consultant and ask them to set up a bouwdepot for you. A bouw-de-what? I hear you ask. A bouwdepot, meaning “construction deposit”, is a loan that can be taken from your mortgage and then used to finance future renovations on your home. 

A bouwdepot is usually organised during the process of establishing the terms of your mortgage. In order to set it up, an appraiser will consider the renovations you would like and make an estimate of the amount needed. 

READ MORE | Which experts can save you money when buying a house in the Netherlands?

Then it’s up to you to turn to the banks (with proof) and ask them to finance the loan. Secured that bag of money? Great! Once the mortgage advisor has arranged the bouwdepot, clients can declare their invoices directly with the bank. This will already be activated following final approval at a notary appointment.

Option two: Apply for an Energiebespaarbudget (energy saving budget) 

Not exactly sure of what renovations you would like to make but know that you do want to make your home more energy efficient in the future? Then the Energiebespaarbudget, meaning “Energy saving budget”, is the best option for you. 

Similar to a bouwdepot, the Energiebespaarbudget is a construction deposit that can be organised alongside your mortgage and set aside to fund future renovations. 

However, it’s different from a bouwdepot in two main ways: 

• You can borrow up to 106% of the value of the house.
• You don’t have to figure out what renovations you want to make until later on.  

READ MORE | How to make the most of your Dutch mortgage: renovating and refinancing

How can you use your existing mortgage to make your home more sustainable? 

Already have your mortgage but looking between your drafty windows and those new energy bills? Geen probleem! There are still ways that you can use your mortgage to finance some sustainable and energy-saving renovations in your home. 

Option one: refinance your mortgage

Okay, yes, it sounds scary — but for many people in the Netherlands, refinancing your mortgage is a feasible option that may even save you money in the long run. 

How? You may be wondering. The key answer here is interest rates. If you took out a mortgage 10 years ago, then chances are you are currently paying higher interest rates on your monthly payments compared to today’s interest rates — even since their recent rise. 

READ MORE | After buying a house in the Netherlands — the ultimate aftersale guide for expats

While interest rates in the Netherlands have started rising again after years of hitting an all-time low, it’s important to note that in the grand scheme of things, they are still relatively low.

On top of this, while mortgage interest rates may be rising, so are saving rates! What can you do with this extra equity once you have refinanced your mortgage? Carry out some sustainable renovations! 

Again, Mira suggests that you talk to your mortgage advisor and explore your options. You can reduce the interest rate on your whole mortgage or obtain an extra amount, this all depends on your mortgage conditions and your income.  

Option two: obtain an additional loan or open a Bouwdepot 

While most mortgage advisors arrange the bouwdepot whilst also setting up a mortgage, that doesn’t mean it’s impossible after you have bought a house. Speak to your mortgage advisor to find out how!

Ways sustainable remodelling can save you money in the Netherlands

While the cost of refinancing your mortgage may make your eyes water, it’s important to note that part of this cost can actually be reduced. 

Reduced interest rates 

The Netherlands smiles down on those who choose to be sustainable — and as a result, many Dutch mortgage providers will actually reduce their monthly interest rates based on the energy label of your home. 

READ MORE | Interest, inflation, and lower house prices: what does this mean for Dutch housing?

So, did you take your home’s energy label from an E to an A? Great! You’ll be paying lower interest each month — meaning you start making back some of the money you spent on those renovations. 

National Insulation Programme 

The Dutch government also sees the value in sustainably remodelling your home. For example, through the National Insulation Programme (Nationaal Isolatieprogramma), you will receive a subsidy to cover up to 30% of the costs of re-insulating your home and/or installing a hybrid heat pump. 

Mortgage costs and tax 

It’s also worth keeping in mind that many of the costs involved in getting a mortgage in the Netherlands are tax-deductible. Meaning that whether you’ve just set up your mortgage or you decided to refinance in order to make some sustainable renovations, you will get some of that money back! 

Will you be opting for a more sustainable home this year? Tell us your thoughts in the comments below!