Choosing a mortgage type is one of the first real decisions you’ll make when buying a home in the Netherlands. As an expat, you may not have grown up with these structures, so the names alone: annuity, linear, interest-only don’t tell you much yet. Here’s what each one actually means for your monthly costs, your tax position, and your long-term plans.
You generally have 3 different types of mortgages in the Netherlands you can choose from: annuity, linear or interest only.
Short answer
The Netherlands has three main mortgage types: annuity, linear, and interest-only. An annuity mortgage keeps your gross monthly payment the same for the entire term, a linear mortgage starts higher and gets cheaper every year, and an interest-only mortgage (available for part of your home’s value, up to 50% at many lenders, though some major lenders have lowered this to 30% for new mortgages since mid-2026) keeps your monthly costs lowest today but leaves the full loan outstanding at the end. Which one fits you best depends mainly on your income outlook, your tax position, and how much flexibility you want in your monthly budget.
Type 1: Annuity mortgage
An annuity mortgage (annuïteitenhypotheek) is a loan where your total monthly payment, interest plus repayment together, stays the same for the whole term. In the early years, most of that payment is interest and only a small part is repayment. As your outstanding debt shrinks, the interest portion gets smaller and the repayment portion grows, while the total stays flat.
Because the interest part is tax-deductible, your net monthly cost still rises slowly over time, even though your gross payment never changes. This makes an annuity mortgage predictable now, with a gradually increasing net cost later.
Type 2: Linear mortgage
A linear mortgage (lineaire hypotheek) works differently: you repay a fixed slice of the loan every month. The total mortgage amount divided by the number of months in your term, for example 360 months over 30 years. The interest you pay on top of that shrinks every month, because it’s calculated on a steadily decreasing balance.
The result is a monthly payment that starts high and drops a little every month. You still get tax deduction on the interest portion, and because you repay faster than with an annuity mortgage, you pay less total interest over the full 30 years.
Type 3: Interest-only mortgage, and who can still get one?
An interest-only mortgage (aflossingsvrije hypotheek) means you pay only interest each month, with no repayment at all. so your monthly cost is the lowest of the three types. Since 2013, Dutch tax rules have made this structure work best for only part of your home’s value, commonly up to 50%, so it’s no longer possible to finance an entire home this way.
There’s no tax deduction on interest-only payments, and the full loan amount is still outstanding when your term ends, so you need a separate plan to repay it eventually. How much you can actually borrow interest-only now differs by lender: since mid-2026, some large lenders, including ABN AMRO and Florius, have lowered their maximum for new mortgages to 30% of your home’s value, with extra euro caps on top, while others still go up to 50%. It’s worth checking the current maximum with your mortgage advisor, since lenders have been actively tightening this.
How do annuity, linear, and interest-only mortgages compare?
The biggest differences between the three types show up in how your monthly payment develops over time and how much interest you pay across the full term. The table below lines them up side by side.
| Mortgage type | Monthly payment pattern | Tax deduction | Total interest over the term | Typically suits |
| Annuity | Gross payment stays flat; net cost rises slowly | Yes, on the interest part | Highest of the three | Predictable budgeting now, e.g. early-career expats expecting income growth |
| Linear | Starts high, decreases every month | Yes, on the interest part | Lower than annuity | Those comfortable with higher payments early on, e.g. people nearing retirement |
| Interest-only (up to 50% at many lenders; 30% at some since mid-2026) | Lowest, and stays flat | No | Loan stays open; depends on your separate repayment plan | Lowering monthly costs now, combined with another repayment route |
Which mortgage type fits your situation as an expat?
Most expats don’t pick a single type in isolation. They match it to their income trajectory and how far off retirement is. An annuity mortgage tends to suit young families with higher current expenses, or professionals early in their career who expect their income to grow.
A linear mortgage is often a better fit if you expect your income to fall later, for example as you approach retirement, since your payments are highest when your income is too. An interest-only mortgage (up to your lender’s current maximum) suits people who want the lowest possible monthly cost now and already have another way to repay that portion later.
Our advisors would happily show you some different mortgage scenarios and what your monthly expenses would look like.
Key takeaways
- The Netherlands has three main mortgage types: annuity, linear, and interest-only.
- Annuity keeps your gross monthly payment flat; linear lowers it every month; interest-only keeps it lowest but repays nothing.
- Only the interest on annuity and linear mortgages qualifies for full Dutch tax deduction.
- Interest-only borrowing is limited to part of your home’s value: up to 50% at many lenders, though some major lenders (including ABN AMRO and Florius) have lowered this to 30% for new mortgages since mid-2026.
- Many expats combine two types rather than choosing just one, see the FAQ below.
FAQ
You generally have 3 different mortgage types in the Netherlands you can choose from: annuity, linear or interest only.
An annuity mortgage works well for young families with higher expenses and workers at the beginning of their career anticipating a higher income in the future. A linear mortgage fits people expecting a decrease in their income or with very high incomes. An interest-only mortgage is for those looking for the lowest possible monthly expenses and will have other means to pay off the remaining debt at the end of the mortgage.
With an annuity mortgage, you repay a fixed part of the loan each month during the whole course of the mortgage. The monthly repayment consists of interest and loan. During the first couple of years, your monthly payments largely consist of interest and just a small amount of loan repayment. However, over time and as your debt decreases, the amount of interest decreases, and your loan repayments increase.
An interest-only mortgage means that every month you only need to make interest payments. As you do not have loan repayments it really decreases the monthly mortgage amount. But there is no tax rebate and at the end of the whole mortgage, you still have an outstanding debt that the bank will be keen to collect.
The linear mortgage means your loan repayment is the same for every month during the full course of the mortgage. You will also pay interest every month. As your outstanding mortgage decreases, every month so do your interest payments. With a linear mortgage, you initially start with high mortgage payments, and over time they decrease.
You don’t have to figure this out alone.
We’ll guide you step by step, all the way to your new home.
