Mortgage Interest Refund in the Netherlands

Mortgage Interest Refund in the Netherlands

As mortgage advisors, we help our clients calculate their borrowing capacity and - hypothetically, “on paper” - simulate the purchase of a property. This allows us to clearly show what the monthly mortgage costs will look like.

In our calculations, we present:

• the gross amount - the amount withdrawn monthly from your bank account by the lender,
• the net amount - the monthly mortgage payment reduced by the estimated tax refund.

In the case of entrepreneurs, we always emphasize that you should primarily consider the gross amount, as the tax refund works differently compared to employees with a fixed, guaranteed salary.

Did you buy a home in the Netherlands?
Are you repaying a mortgage and paying interest (hypotheekrente)?

You may be entitled to a tax refund - even several hundred euros per month.

After signing the notarial deed, it is advisable to check as soon as possible whether you can apply for a provisional tax assessment (voorlopige aanslag). The application can be submitted at any time during the year; however, it is best to do so shortly after purchasing the property in order to start receiving the monthly refund sooner.

As part of the annual tax return, the previously issued decision is reviewed and a final assessment is made regarding your entitlement to:

• deduction of mortgage interest,
• deduction of buyer’s costs incurred when taking out the mortgage (e.g., notary fees or financial advisor costs),
• any tax adjustment based on the provisional assessment (voorlopige aanslag).

If you purchased a property last year, it is worth checking whether you can recover part of the tax you have already paid.

How Does the Mortgage Interest Refund Work?

Homeowners in the Netherlands can deduct paid mortgage costs (hypotheekkosten), including mortgage interest (hypotheekrente), from their taxable income.

The higher the interest and income - the greater the tax benefit.
The settlement is handled by the Dutch tax authority - Belastingdienst.

The result?

✔️ Lower income tax payable
✔️ Or an actual monthly payment to your bank account

Advance Tax Refund - Don’t Wait Until the End of the Year

You do not have to wait for your annual tax return.
You can apply for a voorlopige teruggave and receive the refund throughout the year.

How does it work?

1. Based on your mortgage offer, your accountant calculates the expected amount of interest.
2. The application is submitted on your behalf to Belastingdienst.
3. A response is usually received within approximately one month.
4. The refund is typically paid around the 15th of each month.

In the first year, the amount is divided proportionally over the remaining months of the year.
In the following year, it is divided over a full 12 months.

After the year ends, a final tax assessment takes place. If the data was correct, there are no surprises.

Employee or Entrepreneur - Why Is It Different?

This is one of the most common questions we receive.

Employees on a Work Contract

Income tax is withheld directly from salary each month.
Therefore, a mortgage interest refund often results in a real transfer from the tax office.

Entrepreneurs (ZZP)

At the beginning of the year, Belastingdienst issues a provisional tax assessment.

Deducting mortgage interest (hypotheekrente) means that:

➡️ You pay less tax,
➡️ Or your additional payment is reduced.

The tax benefit itself is the same – only the method of settlement differs.

What Determines the Amount of the Refund?

The refund amount depends on:

• the amount of mortgage interest paid (hypotheekrente),
• the property value (WOZ value),
• gross income (for entrepreneurs: gross income minus business expenses),
• other applicable tax deductions.

Every situation is unique – which is why it is important to perform an accurate calculation before submitting an application.

Check How Much You Can Recover

Did you buy a home in 2025? Do you already have a mortgage and pay interest?

Contact your accountant to check:

• whether you are entitled to a mortgage-related tax refund,
• whether you can apply for an advance tax refund (voorlopige teruggave),
• what your net monthly mortgage payment will be after the tax refund.

We thank TNP Fiscaal for their cooperation in preparing this article.