Increase your mortgage to access your home equity

How to use and release equity of your home in the Netherlands

If your Dutch home has increased in value, you may have built up surplus value — also known as home equity. Many homeowners do not realize that this equity can be accessed and used without selling their home.

In this article, you will learn what home equity is, how it works in the Netherlands, and how to release your surplus value through practical and financially smart options.

What is home equity

Home equity or surplus value arises when the market value of your home exceeds your remaining mortgage debt. It represents the portion of your property you truly own.

Home equity = Current home value – Remaining mortgage balance

Example:
If your property is worth €500,000 and your remaining mortgage is €300,000, you have €200,000 in surplus value.

Home equity grows when you make mortgage repayments and when property prices rise. If your home’s value drops below your mortgage amount, you may face negative equity, which could leave you with a debt after selling.

Why consider accessing your home equity?

Getting into the equity you’ve built up in your home can open up a range of valuable opportunities. For example, you might use these funds to:

- Renovate or make your home more energy efficient

- Purchase another property, using a bridging loan or by transferring equity

- Reduce your mortgage interest rate

- Provide financial support to your children

- Create a financial buffer for unexpected expenses

- Invest in a second home or a rental property

The most important thing is to know how to access your equity in a way that’s secure and fits your financial plans.

8 ways to release yoru equity

There are several ways to access the surplus value in your Dutch home, each with its own purpose, requirements, and tax implications.

1. Sell your home to access equity

Selling your home is the simplest way to cash out your equity. After repaying your mortgage, the remaining profit (your surplus value) becomes yours.

In the Netherlands, you do not pay tax on the profit from selling your primary residence.

2. Increase your mortgage

If you do not plan to move, you can increase your current mortgage or add a second mortgage to unlock your equity.

Example:
Your home is valued at €600,000, and you owe €400,000. You may be able to borrow an additional €100,000–€150,000, depending on your income and the lender’s rules.

Key points:

• Lenders reassess income, affordability, and debt.

• You will need a property valuation (taxatie).

• Notary and advisory costs may apply.

• If funds are used to improve your home, interest remains tax-deductible.

• If used for personal expenses (such as car, travel, or education), the interest is not deductible.

Not all lenders offer consumer-credit mortgages, so consult an advisor before applying.

3. Refinance your mortgage

Using the equity in your home means turning some of your home’s value into cash you can use. You might put it toward renovating your home to make it more comfortable or energy-efficient, or even buy another place.

Some people use their equity to lower their mortgage interest rate, which helps them pay less each month. Others choose to help their kids buy their first home or set aside savings for emergencies. You could also invest in a second property and rent it out to bring in some extra income. It’s a smart way to make the value of your home work for you.

While refinancing involves paying again valuation, notary, and possibly early repayment fees, it can reduce your monthly payments and free up part of your surplus value.

4. Use equity for home renovation or sustainability

Renovating or making your home more energy-efficient increases comfort and long-term value.

You can access equity for:

• Insulation or heat pumps

• Solar panels or green roofing

• Kitchen or bathroom upgrades

Funds are often managed through a construction deposit (bouwdepot). You pay today’s mortgage interest on this portion, and interest is tax-deductible if used for home improvements. Many lenders offer discounted rates for sustainable upgrades

5. Use surplus value to buy a second property

Homeowners often use equity to buy a second home, such as a holiday house or a rental property. You can typically borrow 70–80% of your available equity for this purpose. Be aware that:

• Interest rates are higher for second homes.

• Transfer tax (overdrachtsbelasting) is higher (currently 10.4% for investment property).

• Different tax rules apply to rental income.

6. Use equity to help your children or donate

You can use your surplus value to support children or grandchildren — for example, to help them buy a first home or pay tuition.

When used this way, the loan interest is not tax-deductible, since the money is not invested in your own home.Check the gift tax exemption limits on the Belastingdienst website before donating.

7. Use equity as a financial buffer or for a major purchase

Want a new car, campervan, or extra savings buffer? You can release part of your home’s value via a second mortgage.

However, as this is consumer borrowing, it is subject to affordability checks, and interest is not deductible. Always ensure the extra payments fit comfortably within your budget.

8. Lower your mortgage interest rate using your equity

Your loan-to-value (LTV) ratio — the percentage of your home’s value covered by your mortgage — determines your interest rate tier.
As your equity increases, your LTV decreases, potentially qualifying you for a lower rate.

Calculating how much equity you can access

Having surplus value does not mean you can withdraw it all. Dutch lenders will consider:

• Your gross income and debts

• Monthly payment affordability

• Purpose of the loan (home improvement vs. personal use)

A licensed mortgage advisor can calculate exactly how much you can safely and responsibly release from your home’s equity.

If you are considering using your home’s surplus value, speak with a mortgage advisor to explore your options and find the best solution for your situation.