NL: Banks can offer higher mortgages for greener homes from next year

AMSTERDAM - From next year, mortgage lenders in the Netherlands will be able to offer higher mortgages to people who buy an energy-efficient home. The idea is that they can afford to borrow more because their energy bill will be low. The difference can be up to 50,000 euros, AD reports based on new guidelines for mortgages in 2024 that are currently on outgoing Finance Minister Sigrid Kaag’s desk. 


The guidelines allow banks to take the energy bill that the new homeowner will receive every month into account when calculating the mortgage payment. Those who have low heating costs can afford a higher installment, is the idea. People purchasing a well-insulated home with an energy label of A or B can borrow around 10,000 euros more with the same income than those buying homes with energy labels E, F, or G next year. For a zero-on-the-meter home, buyers can borrow up to 50,000 euros more. 


The new mortgage guidelines also state that the buyer of a low-energy label home can borrow up to 20,000 euros extra to finance sustainability improvements. However, according to the Dutch Sustainable Energy Association (NVDE), that amount is about a third too low to reduce the energy bill of a cold, drafty home. 


Housing market professor Peter Boelhouwer thinks this measure will result in an increasing gap in the prices of homes with a low energy label and those with a high label. “As a result, there will really be a division in the housing market between sustainable and non-sustainable homes,” he said to AD. “If the housing market rises very slightly, houses with E, F, and G will fall in price. And with large increases in the market, prices of poorly insulated homes won’t rise or rise very slightly. It will become increasingly difficult to sell houses with a low energy label.” 


According to AD, about 15 percent of homes in the Netherlands have a low energy label. A home with energy label G uses about 50 percent more gas than one with label A. 


Mortgage broker De Hypotheker is also worried about the new guidelines. “Rewarding the purchase of more energy-efficient homes makes these homes more expensive, so we don’t think this is the right measure. Homes with a higher energy label will become less accessible to a large group of buyers,” Carina Kloet of De Hypotheker told the newspaper. “In practice, we increasingly see that homes with an unfavorable energy label are less popular and expensive to upgrade. We expect that this will increasingly divide the price in the coming years.” 

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