From the summer it will be more difficult to get loans for residential real estate. The Netherlands Authority for the Financial Markets (FMA) has issued the “Regulation Measures for Real Estate Financing Credit Institutions”, which will now come into effect on August 1 instead of July 1 as originally planned. Also new compared to the concept is a higher marginal income limit of 50,000 instead of 40,000 euros, the FMA announced on Monday.
In order to facilitate renovations and renovations, in particular the switch from fossil fuels to renewable energy sources, financing up to a marginal threshold of €50,000 has been exempted from the new requirements.
Stricter guidelines
In future, for the purchase of a home, 20 percent of the purchase price (including additional costs) must be demonstrated in the form of equity, the monthly repayment may not exceed 40 percent of the monthly available net household income and the term of the financing must not be older than 35 years.
In total, a maximum of 20 percent of all loans with a bank may exceed one of the upper limits.
“The goal is to limit risks”
“The purpose of this regulation is to mitigate the increasing systemic risk in residential real estate financing, given the boom in real estate prices, the turnaround in interest rates, the fragile economic environment and current lending practice,” said FMA board members Helmut Ettl. and Eduard Müller according to the broadcast. “When lending, the focus should be on the borrower’s ability to repay and not on the mortgage security for the loan.”
Source: Krone
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