Interest-Only Mortgage in the Netherlands: Complete Guide for Expats

An interest-only mortgage in the Netherlands is known in Dutch as an aflossingsvrije hypotheek. It is a mortgage structure where you normally pay interest during the mortgage term without being required to repay the principal every month.

That makes the monthly payment lower than with an annuity or linear mortgage. However, the mortgage debt does not automatically decrease. At the end of the term, the remaining mortgage still has to be repaid, refinanced or covered from the proceeds of selling the property.

Interest-only mortgages are still available in the Netherlands, but the rules have become considerably stricter. This is particularly important in 2026 because several major Dutch mortgage lenders have reduced the amount they are willing to lend on an interest-only basis.

For expats, there is another important consideration. The Dutch tax treatment of an interest-only mortgage depends heavily on when the mortgage was originally taken out. A newly arranged interest-only mortgage will normally not qualify for mortgage interest tax deduction, while certain mortgages dating from before 2013 can fall under transitional rules.

This guide explains how an interest-only mortgage works, how much you may be able to borrow interest-only in 2026, what the tax consequences are, which risks you should consider, and what happens when an existing interest-only mortgage reaches its end date.

Want to know whether an interest-only mortgage could fit your situation?

Schedule a free mortgage consultation with Expat Mortgage Platform. Your first consultation is free and non-binding.

What Is an Interest-Only Mortgage?

With an interest-only mortgage, you borrow money to finance your property but normally do not make mandatory monthly repayments of the principal during the agreed mortgage term.

Your monthly mortgage payment therefore mainly consists of interest.

Suppose you have an interest-only mortgage of €300,000 with an interest rate of 4%. Ignoring changes in the interest rate and other costs, the interest payment would be approximately €1,000 per month.

After paying that interest for many years, however, the mortgage itself could still be €300,000. Paying interest does not reduce the original debt.

This is the most important difference between an interest-only mortgage and repayment mortgages such as an annuity or linear mortgage.

With an annuity or linear mortgage, part of your monthly payment goes towards reducing the mortgage balance. With an interest-only mortgage, you have to make separate plans for how the remaining debt will eventually be repaid.

What Does Aflossingsvrije Hypotheek Mean?

If you encounter the term aflossingsvrije hypotheek while buying a house in the Netherlands, it normally refers to an interest-only mortgage.

A literal translation can be confusing. “Aflossingsvrij” does not mean that you never have to repay the mortgage.

It means that you are generally not required to make scheduled repayments during the mortgage term.

The outstanding loan must still ultimately be dealt with. This can happen through repayment from savings, the sale of the property, refinancing, or another solution agreed with the lender.

For expats unfamiliar with Dutch mortgage terminology, this distinction is essential. An aflossingsvrije hypotheek should not be confused with an interest-free mortgage. You still pay mortgage interest.

Can You Still Get an Interest-Only Mortgage in the Netherlands in 2026?

Yes. Interest-only mortgages have not disappeared from the Dutch mortgage market.

However, financing your entire home with a new interest-only mortgage is generally not available through mainstream residential mortgage lending. Interest-only lending is normally limited to part of the property’s market value, and individual lenders can impose stricter limits.

This has become particularly important in 2026.

Several major lenders have reduced their interest-only lending from the previous 50% level to a maximum of 30% of the property’s market value.

Some banks also impose an absolute euro limit.

As a result, there is no longer one percentage that accurately describes every Dutch lender. The amount you can finance interest-only depends on the lender, the property value, whether you are buying, refinancing or modifying an existing mortgage, and whether you already have an interest-only mortgage.

New Interest-Only Mortgage Rules in 2026

The Dutch interest-only mortgage market changed significantly in 2026.

Several large mortgage providers tightened their acceptance policies following concerns about the long-term risks associated with mortgages where the principal is not automatically repaid.

For new applications and certain changes to existing mortgages, examples of current lender policies include:

At ABN AMRO, the absolute maximum for affected new interest-only lending depends on the value of the property. The maximum is €150,000 for properties worth up to €1 million, €250,000 for properties between €1 million and €2 million, and €500,000 for properties worth €2 million or more. The 30% property-value limit still applies, so the lower applicable maximum determines what is possible.

These are lender policies, not a guarantee that you can borrow the maximum amount shown.

Your income, existing debts, age, pension income, residence situation, property and complete financial profile still determine whether a mortgage is affordable and acceptable.

Other lenders can also use different limits. Mortgage policies can change, which is why comparing lenders is particularly important if an interest-only component forms part of your strategy.

Example: How Much Could Be Interest-Only?

Imagine you buy a property with a market value of €500,000.

If a lender allows a maximum of 30% of the property’s value to be interest-only, the percentage-based maximum would be:

30% of €500,000 = €150,000.

If that lender also has a €150,000 absolute limit, the maximum interest-only portion would therefore be €150,000.

The remaining mortgage would need to be structured differently, for example as an annuity or linear mortgage, assuming you qualify for the total financing.

For a property worth €800,000, 30% would equal €240,000. That does not automatically mean you can borrow €240,000 interest-only. At a lender with a €150,000 absolute limit, €150,000 would still be the maximum.

This is why the question “What percentage can I borrow interest-only?” does not provide the full answer anymore. You also need to know the individual lender’s euro limit and acceptance criteria.

Can Expats Get an Interest-Only Mortgage?

Yes, an expat can potentially obtain an interest-only mortgage in the Netherlands.

There is no separate Dutch mortgage type exclusively for expats. International buyers generally use the same mortgage structures as Dutch buyers.

The difference is in the mortgage assessment.

A lender may also need to consider your residence permit, nationality, employment contract, foreign income, salary currency, length of residence in the Netherlands, and existing financial commitments abroad.

An interest-only structure therefore does not remove the normal mortgage requirements.

If you want to understand the broader eligibility rules first, read our complete guide to obtaining a mortgage in the Netherlands as an expat.

You can also use our mortgage calculator for expats for an initial indication of your borrowing capacity.

Is Mortgage Interest on an Interest-Only Mortgage Tax Deductible?

This is one of the most important questions surrounding an interest-only mortgage in the Netherlands.

For most people taking out a completely new mortgage today, the interest on a new interest-only mortgage portion does not qualify for the Dutch mortgage interest deduction.

The major dividing line is 1 January 2013.

For new owner-occupied home loans taken out from that date, the loan generally needs to be repaid at least according to an annuity or linear repayment schedule within a maximum of 30 years for the interest to qualify for the mortgage interest deduction.

An interest-only mortgage does not satisfy that repayment requirement.

This means that low gross monthly payments do not automatically mean low net monthly costs. You need to compare the loss of potential tax deductibility with the benefit of not making monthly principal repayments.

For a complete explanation of the Dutch tax system, see our guide to mortgage interest deduction in the Netherlands.

What About an Interest-Only Mortgage from Before 2013?

Older mortgages can be treated differently.

If you had qualifying owner-occupied home debt before 2013, transitional tax rules may allow the mortgage interest deduction to continue without requiring the old mortgage portion to be converted into an annuity or linear mortgage.

This is commonly referred to as the transitional arrangement for an existing owner-occupied home debt, or bestaande eigenwoningschuld in Dutch.

That right can be extremely valuable.

It does not necessarily disappear simply because you refinance your mortgage or move to another home. Under certain conditions, qualifying pre-2013 mortgage rights can continue or be used in relation to a subsequent home.

However, there are important limits.

If you increase your mortgage after 2012, the new amount does not automatically receive the same tax treatment. The additional borrowing generally falls under the post-2013 rules if you want the interest to qualify for deduction.

There can also be special considerations if you owned property outside the Netherlands before 2013 and later became subject to the Dutch owner-occupied-home tax rules.

For expats with an older Dutch or foreign mortgage history, this is one area where checking your individual situation before changing or repaying a mortgage can be particularly important.

What If I Move House with an Existing Interest-Only Mortgage?

Moving does not automatically mean you lose every benefit associated with an older interest-only mortgage.

If your mortgage qualifies as existing owner-occupied home debt under the transitional rules, it may be possible to retain that tax treatment when buying another owner-occupied property.

That does not mean your lender must allow exactly the same mortgage structure.

Tax rules and mortgage lender acceptance rules are two different things.

A lender may apply current restrictions when you move your mortgage to another property, even if you still have historical tax rights.

This distinction has become more important since the 2026 lender policy changes.

For example, some lenders now apply their new 30% interest-only limits when an existing customer moves to another property. This can mean that a mortgage structure that works perfectly well in your current home cannot simply be copied to your new home.

If you already have an interest-only mortgage and are considering moving, have the mortgage structure checked before committing to a new property.

Interest-Only Mortgage Versus Annuity Mortgage

The main attraction of an interest-only mortgage is the lower required monthly payment.

Consider a simplified example using a €300,000 mortgage, a 30-year term and a constant 4% interest rate.

An interest-only mortgage would require approximately €1,000 per month in interest. After 30 years, the €300,000 principal would still remain.

An annuity mortgage using the same illustrative interest rate would have a gross monthly payment of approximately €1,432. Part of that payment is interest and part is repayment. At the end of the 30-year schedule, the mortgage would be fully repaid.

Assuming the rate remained exactly 4% for the entire 30 years, total interest on the interest-only structure would amount to approximately €360,000. Under the annuity example, total interest would be approximately €215,600.

This simplified example demonstrates an important point.

An interest-only mortgage can have a lower monthly payment while still costing more in interest over the long term because you continue paying interest on the full outstanding balance.

Actual mortgage rates, tax consequences, and lender conditions can make the real comparison different.

Interest-Only Mortgage Versus Linear Mortgage

A linear mortgage works very differently.

With a linear mortgage, you repay the same amount of principal every month. Your outstanding mortgage therefore falls continuously.

Because the interest is calculated over a smaller mortgage balance each month, the interest payment also falls.

Using the same illustrative €300,000 mortgage over 30 years at 4%, the first gross monthly payment on a linear mortgage would be approximately €1,833. The monthly payment would then gradually decline.

The starting costs are therefore much higher than with an interest-only mortgage, but your debt falls substantially faster.

Over the complete 30-year example, the total interest would be approximately €180,500 if the interest rate remained 4% throughout.

If you are comparing repayment structures, read our annuity versus linear mortgage guide.

Can You Combine an Interest-Only Mortgage with an Annuity or Linear Mortgage?

Yes. In practice, this is often the most relevant way to use an interest-only mortgage today.

Your mortgage can consist of several separate loan parts.

For example, someone purchasing a €500,000 property could potentially structure the mortgage as:

€150,000 interest-only and €350,000 annuity.

Another borrower might combine an interest-only portion with a linear mortgage.

Whether this is possible and sensible depends on your lender, income, tax position and long-term financial plans.

A combined structure can reduce your current monthly payment while still ensuring that part of your total mortgage is automatically repaid.

The trade-off is that the interest-only portion remains outstanding.

For this reason, the right question is usually not “Is an interest-only mortgage good or bad?”

The better question is “How much interest-only debt makes sense within my complete mortgage and financial plan?”

Advantages of an Interest-Only Mortgage

An interest-only mortgage can provide substantially lower required monthly payments because you are not making compulsory principal repayments during the mortgage term.

That can create additional monthly cash flow for savings, investments, pension contributions, childcare, renovations or other financial priorities.

It can also provide flexibility for homeowners with significant assets who deliberately prefer not to tie additional capital up in their property.

For someone with a qualifying pre-2013 mortgage, the combination of historical tax treatment and relatively low required payments can also make an existing interest-only mortgage worth preserving.

However, these advantages only make sense when the remaining mortgage debt is part of a deliberate long-term plan.

Low monthly costs today should not create an unaffordable problem later.

Risks and Disadvantages of an Interest-Only Mortgage

The biggest risk is straightforward: your mortgage debt does not automatically disappear.

If you borrow €200,000 interest-only and never make an additional repayment, you can still owe €200,000 at the end of the mortgage term.

That creates several risks.

Your home may be worth less than expected. Your income may fall. Your pension income may be lower than your employment income. Mortgage lending standards may be stricter when you need to refinance. Interest rates may also be higher.

A lender assessing a refinancing application in the future does not have to assume that today’s mortgage conditions will still apply.

There is also an interest-rate risk. If your fixed-rate period ends and the new mortgage interest rate is considerably higher, your monthly payment can increase even though the mortgage balance has not changed.

Another disadvantage for newer mortgages is the loss of the mortgage interest tax deduction on the interest-only portion.

Finally, a lower compulsory mortgage payment can create a false sense of affordability. If the difference is simply spent rather than saved or invested, you may reach the end of the mortgage with the full original debt and no dedicated capital to repay it.

What Happens at the End of an Interest-Only Mortgage?

An interest-only mortgage still has an end date.

At that point, the remaining mortgage balance generally needs to be dealt with.

One possibility is repaying the mortgage using savings or investments that you have accumulated during the mortgage term.

Another option is selling the property and using part of the sale proceeds to repay the mortgage.

You may also be able to refinance or extend the mortgage, but this should never be treated as guaranteed.

A lender will reassess whether the financing is acceptable. Your income, pension income, age, property value, remaining mortgage, interest rates and the lending rules applying at that time can all influence the outcome.

For homeowners approaching retirement, this becomes particularly important. A mortgage that is easily affordable based on employment income may be more difficult to refinance based on future pension income.

Do not wait until the final months of the mortgage term before investigating your options.

What If My Interest-Only Mortgage Ends After I Retire?

Retirement is one of the most important planning moments for an interest-only mortgage.

Mortgage lenders look at the income that will actually be available to pay the mortgage.

If you are approaching retirement, that can mean your future pension income becomes relevant even while you are still employed.

This can affect whether a lender is willing to extend or refinance your existing mortgage.

Having significant equity in the property can help, but equity alone does not automatically solve the affordability assessment. A lender still needs to determine whether the mortgage payments are sustainable.

If your interest-only mortgage ends close to or after retirement, it is wise to evaluate the situation several years in advance rather than assuming refinancing will automatically be available.

Should You Repay an Interest-Only Mortgage Early?

Not necessarily.

Paying off an interest-only mortgage early reduces your debt and the amount of interest you pay. It can therefore reduce financial risk.

But that does not mean that every euro of available savings should automatically go towards the mortgage.

You also need to consider your emergency savings, mortgage interest rate, tax position, pension planning, investment strategy, future renovations, moving plans and the lender’s early repayment conditions.

For example, someone with very little cash savings may not benefit from putting every available euro into the house. The lower mortgage debt could be useful, but the loss of financial liquidity could create a different problem.

Someone approaching retirement with a large interest-only balance may reach a very different conclusion.

The right repayment strategy therefore depends on your complete financial position.

Can You Convert an Interest-Only Mortgage into an Annuity or Linear Mortgage?

Often, yes.

An existing interest-only mortgage can sometimes be converted fully or partially into a mortgage where you make regular principal repayments.

You could also leave part of the mortgage interest-only and convert another part.

This can help gradually reduce the outstanding debt without immediately switching the entire mortgage to much higher monthly repayments.

Before changing an older interest-only mortgage, however, always check the tax consequences.

If your mortgage benefits from pre-2013 transitional treatment, you should understand what happens to those rights before making structural changes.

It is also important to compare the new monthly costs with your future financial position rather than looking only at what you can afford today.

Can You Refinance an Interest-Only Mortgage?

Yes, refinancing can be possible.

Your existing lender may offer options, or you may be able to move the mortgage to another lender.

The challenge in 2026 is that a new lender can apply its current interest-only lending limits.

This means you cannot assume that another lender will accept the same interest-only percentage you currently have.

Suppose your home is worth €500,000 and you currently have a €225,000 interest-only mortgage.

That represents 45% of the property’s value.

If the lender you want to move to allows only 30% interest-only, a straightforward transfer of the complete €225,000 interest-only portion may not be possible. Part of the mortgage may need to be repaid or converted into another repayment structure.

Refinancing can also involve valuation costs, mortgage advice costs, notary costs and potentially a compensation payment for ending a fixed-rate agreement early.

A comparison should therefore consider the total financial result, not simply the advertised interest rate.

Can I Get an Interest-Only Mortgage with NHG?

The rules for an interest-only mortgage with the National Mortgage Guarantee, known as NHG, are more restrictive than simply asking whether a lender offers interest-only mortgages.

Under the standard NHG rules, an interest-only loan portion is generally possible when it relates to qualifying existing owner-occupied home debt under the transitional rules. The interest-only portion may not exceed 50% of the property’s market value.

For a buyer taking out a completely new mortgage without qualifying existing pre-2013 debt, this means you should not assume that a newly created interest-only portion can simply be combined with NHG.

NHG also has special rules for situations involving financial difficulties and preserving homeownership.

If NHG is relevant to your purchase or existing mortgage, have the exact mortgage structure checked rather than relying only on the general property-value threshold.

Are Interest-Only Mortgage Rates Higher?

They can be.

Mortgage lenders price products according to their own risk policies. An interest-only mortgage can therefore have a different interest rate from an annuity or linear mortgage at the same lender.

The rate can also depend on the ratio between your mortgage debt and the property’s market value, your fixed-rate period, whether NHG applies, and other product conditions.

This makes comparing mortgage structures using one advertised interest rate unreliable.

A lower monthly payment caused by not repaying principal does not automatically mean the interest-only product itself has the lowest mortgage rate.

Is an Interest-Only Mortgage a Good Idea for Expats?

An interest-only mortgage can be suitable for some expats, but it should be chosen for a clear financial reason.

It may be worth investigating if you have substantial savings or investments, want more flexibility in your monthly cash flow, have qualifying pre-2013 mortgage rights, expect to repay the debt from another reliable source, or want to combine a limited interest-only portion with a repayment mortgage.

It can be less suitable if you are relying entirely on future house-price increases, have little capacity to save separately, expect a significant fall in income, have uncertain retirement finances or simply want the lowest possible monthly payment without a plan for the remaining debt.

For expats, your expected length of stay in the Netherlands can also matter.

If you expect to move internationally again, flexibility may be valuable. At the same time, you need to understand what happens to the mortgage if you sell, rent out the property, leave the Netherlands, or later buy another Dutch home.

Mortgage structure should follow your financial plan, not the other way around.

Interest-Only Mortgage for Existing Homeowners

If you already have an interest-only mortgage, the 2026 changes do not automatically mean your existing mortgage must immediately be changed.

In many cases, if you leave the mortgage untouched, the existing arrangement can continue according to the terms agreed with your lender.

Problems are more likely to arise when you want to make a significant change.

That can include moving house, refinancing, increasing the mortgage, increasing the interest-only portion or reaching the end of the mortgage term.

Some lenders have transitional arrangements for existing customers, while others apply new limits to particular changes.

This makes the difference between “keeping an existing mortgage” and “applying for a new or changed mortgage” extremely important.

Three Questions to Ask Before Choosing Interest-Only

Before choosing an interest-only component, you should be able to answer three questions clearly.

First, why do you want the lower monthly payment?

If the money you are not using for repayments has a deliberate purpose, the structure may be part of a wider financial strategy. If it simply disappears into monthly spending, the long-term benefit is much less convincing.

Second, how will you repay the remaining mortgage?

Possible answers include savings, investments, future property sale proceeds or a planned reduction of the mortgage over time. “I will refinance later” is less certain because future mortgage approval cannot be guaranteed.

Third, what happens if your circumstances change?

Consider lower income, retirement, divorce, relocation abroad, higher interest rates, and falling property values. A good mortgage should remain manageable when life does not follow the ideal scenario.

Interest-Only Mortgage Advice for Expats

An interest-only mortgage looks simple because the monthly payment is easy to understand.

The decision behind it is not simple.

You need to combine lender policy, Dutch tax rules, future income, pension planning, the property’s value, your expected time in the Netherlands and your wider financial goals.

For expats, lender selection can make an especially large difference because mortgage providers also treat residence status, temporary contracts, foreign income and international financial commitments differently.

Expat Mortgage Platform provides independent mortgage advice specifically for international buyers and homeowners in the Netherlands.

We can compare the available lenders, determine whether an interest-only component is possible, explain the tax consequences, and compare it with annuity and linear alternatives.

Book your free mortgage consultation and find out which mortgage structure fits your situation.

Frequently Asked Questions About Interest-Only Mortgages in the Netherlands

What is an interest-only mortgage called in Dutch?

An interest-only mortgage is called an aflossingsvrije hypotheek in Dutch. You normally pay interest during the term without mandatory scheduled principal repayments. The remaining debt still has to be repaid eventually.

Can you still get an interest-only mortgage in the Netherlands?

Yes. Interest-only mortgages are still available, but lenders limit how much of the property value can be financed interest-only. Several major lenders tightened their limits to 30% of the property value in 2026, and some also use absolute euro caps.

Can I get a 100% interest-only mortgage in the Netherlands?

For a normal new residential mortgage, you should not expect to finance 100% of the property value using an interest-only mortgage. Mainstream lenders restrict the interest-only portion and can apply additional limits.

What is the maximum interest-only mortgage in the Netherlands in 2026?

There is no single maximum that applies to every lender. Several major lenders now limit new or changed interest-only lending to 30% of the property’s market value. Some also use absolute limits, such as €150,000. Other lender policies can differ.

Is an interest-only mortgage tax deductible in the Netherlands?

For a newly originated owner-occupied mortgage after 1 January 2013, an interest-only portion normally does not meet the repayment requirement for mortgage interest tax deduction. Qualifying existing mortgage debt from before 2013 can fall under transitional rules.

Can an expat get an interest-only mortgage?

Yes, potentially. Expats generally have access to the same Dutch mortgage structures as other borrowers, but the lender will also assess factors such as residence status, employment, income currency and financial commitments abroad.

Do I ever repay the principal on an interest-only mortgage?

Yes. “Interest-only” refers to the payments during the mortgage term. The remaining principal still needs to be repaid, usually at the end of the mortgage, when the property is sold or through another agreed solution.

What happens when an interest-only mortgage expires?

You normally need to repay the remaining debt. This may be done using savings, selling the property or arranging new financing. Refinancing is not guaranteed because the lender will assess your circumstances and the applicable mortgage rules at that time.

Can I refinance an interest-only mortgage?

Often, yes. However, a new lender may apply current limits to the amount that can remain interest-only. You may therefore need to convert part of the mortgage into an annuity or linear structure.

Can I keep my old interest-only mortgage when I move?

Potentially. Existing pre-2013 tax rights can sometimes continue when moving to another owner-occupied home, but your mortgage lender can still apply current lending policies to the new mortgage. Tax treatment and lender acceptance should therefore be assessed separately.

Can I make extra repayments on an interest-only mortgage?

Usually, yes, although the exact conditions depend on the lender and mortgage contract. Many mortgages allow a certain amount to be repaid each year without compensation. Check your mortgage conditions before making a large repayment.

Is it smart to repay an interest-only mortgage early?

It can be, but it is not automatically the best choice for everyone. The decision depends on your interest rate, savings, tax position, pension, investment plans, future income and need for financial liquidity.

Is an interest-only mortgage cheaper than an annuity mortgage?

The required monthly payment is usually lower because you are not repaying the principal. That does not necessarily make it cheaper overall. Because your debt remains higher, you may pay considerably more interest over the complete mortgage term.

Can I combine an interest-only mortgage with an annuity mortgage?

Yes. A Dutch mortgage can consist of several loan parts. A limited interest-only portion can therefore sometimes be combined with an annuity or linear mortgage for the rest.

Can I convert my interest-only mortgage into an annuity mortgage?

Often, yes. You may be able to convert all or part of the mortgage. Before changing an older mortgage, check the tax consequences and calculate how the higher monthly repayment will affect your finances.

What happens to my interest-only mortgage when I retire?

The mortgage does not disappear when you retire. If you need to refinance or extend it, your lender may assess the mortgage using your pension income. Planning ahead is particularly important when the mortgage end date falls close to or after retirement.

Find Out Which Mortgage Structure Fits You

Interest-only, annuity and linear mortgages each solve a different problem.

The best option depends on much more than today’s monthly payment.

At Expat Mortgage Platform, we help expats compare Dutch lenders and understand what each mortgage structure means for their monthly costs, tax position and long-term financial security.

Start with our expat mortgage calculator if you want an initial borrowing estimate.

For a personal assessment, schedule your free mortgage consultation.

The first consultation is always free and non-binding.