As the name says, the ‘starter loan’ is a form of loan that was created for starters on the labor market.
If you buy a house as a starter, you can borrow an additional amount above the normal mortgage loan with a start-up loan. The start-up loan is financed by the municipalities, the Dutch government indirectly also pays for these costs.
Characteristics of the start-up loan
The start-up loan is characterized by a fixed-rate period of 15 years. You do not have to pay interest and repayments in the first 3 years after taking out the loan; in that period the loan is temporarily free of charge. If your income has increased thereafter, for example because you have found a better paid job, you will automatically pay interest and repayment for your loan. If your income has not yet increased, you can apply for a so-called ‘reassessment’ at the municipality. This assessment examines which monthly amount of interest and repayment fits your income.
When do I close a start-up loan?
The start-up loan was specially created for starters in the labor market, who would like to buy a house. Only these starters are therefore eligible for this loan form. You can only take out the start-up loan for the purchase of your home. Your mortgage can not be fully financed with a start-up loan, so you also have to take out a mortgage loan.
How does closing a start-up loan work?
About 200 municipalities in the Netherlands offer the ‘start-up loan’, ie there are still municipalities in the Netherlands that do not use this type of loan.
Credit assessment based on your income
When providing the loan, your current income will be looked at. The municipality therefore ensures that you do not get into financial problems because of the loan. The repayment and interest payment ultimately also depends on the level of your income, so this is also flexible. The start-up loan is one of the most advantageous forms of lending in the area of interest rates.
Interest deduction for the start-up loan
You can deduct the interest you have to pay for your start-up loan from your payment, just like the costs for a mortgage loan. As a result, you ultimately pay less tax.
Personal loan as an alternative to the start-up loan
Does your municipality not have a start-up loan, or do you not get a start-up loan from your municipality on the basis of your current income? The personal loan may well serve as an alternative to the start-up loan. With the personal loan, the term is also fixed (usually 1 to 3 years). Below you can see where you can take out a personal loan at the moment cheaply.