Keep to let Mortgage

Understanding the Keep-to-Let Mortgage in the Netherlands

A keep-to-let mortgage, also known as a buy-to-let mortgage, allows property owners to finance the purchase of a property with the intention of renting it out to tenants. ABN Amro Bank NV offers this option, providing financing solutions tailored specifically for regular homebuyers on the Dutch rental market to transfer their existing property into a keep-to-let mortgage.

The main advantage of keeping your property is that the rental income is not taxed since it shifts from box 1 (taxable income: work and owner-occupied house) to box 3 (capital tax: savings and investments). Furthermore, maintaining the property does not incur significant additional expenditures. In addition, the rental property is transferred from box 1 (labour and revenue) to box 3 (assets).

How Does a Keep-to-Let Mortgage Work?

With ABN Amro's keep-to-let mortgage, you can transfer your existing mortgage loan in order to be able to rent out your property. The rental income generated from the property can contribute towards repaying the mortgage and generating cash flow. ABN Amro Bank NV typically offers loans of up to 75% - 80% of the property value in a rented state, although specific terms may vary based on factors such as your income and state of the property.

Mortgage rates for keep-to-let homes are higher than those for regular mortgages, with a 1% difference as a general rule. So, your existing interest rate will stay active and increased with 1%. This is a huge opportunity as the regular buy-to-let mortgage interest rates are roughly 5% up to even 7%.

Benefits of the Keep-to-Let Mortgage Option

1. Investment Opportunity: The keep-to-let mortgage option allows you to invest in real estate and potentially benefit from property value appreciation over time.
2. Rental Income: The rental income from the property can help offset the mortgage costs and provide a steady cash flow.
3. Flexibility: Being able to rent it out anytime that suits you, based on Dutch rules and regulations.

Things to consider and the risks that come with renting out a property

1. Property Management: Being a landlord requires time, effort, and expertise in managing tenants, maintenance, and legal obligations. Consider whether you have the capacity to handle these responsibilities or if you'll need assistance from property management services.
2. Rental Market Analysis: Conduct thorough research on the rental market in your desired location to assess the potential demand, vacancy rates, rental yields, and regulatory considerations.
3. Interest Rates and Costs: Take into account the interest rates, fees, and additional costs associated with the keep-to-let mortgage. Understand the impact they may have on your cash flow and investment returns.
4. Property Valuation and Insurance: Adequate property valuation and insurance coverage are crucial to protect your investment. ABN Amro Bank NV requires property valuation as part of the mortgage process.

Applying for a Keep-to-Let Mortgage with ABN Amro Bank NV

We are happy that you have made the decision to apply for a keep-to-let mortgage via us. See below for an overview of the steps and costs.

1. Research and identify the property that you wish to transfer into a keep-to-let
2. Gather the necessary documentation, such as proof of income, financial statements, valuation of property and property details.
3. Contact us to discuss your requirements and initiate the application process.
4. Provide the requested documentation to support your mortgage application.
5. ABN Amro Bank NV will evaluate your application, including factors like your financial position, credit history, and property analysis.
6. If approved, you'll receive a mortgage offer outlining the terms and conditions. Review the offer carefully before accepting.
7. Complete the necessary legal and financial arrangements, including property valuation and insurance, and finalize the mortgage process.

The keep-to-let mortgage option via ABN Amro Bank NV presents a valuable opportunity for homebuyers looking to enter the Dutch rental market. By considering the benefits, risks, and application process outlined in this guide, you can navigate the process with confidence and embark on a successful property investment journey. Remember to conduct thorough research, seek professional advice when needed, and make informed decisions based on your specific financial goals and circumstances.

Get in touch with us to start your rental journey now!

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