The idea behind it

In the Netherlands you can deduct the interest on your mortgage from your taxable income in box 1. This is called the hypotheekrenteaftrek. It lowers your tax bill every year for as long as the mortgage runs, up to a maximum of 30 years.

Who can use it

You qualify when:

  • The mortgage is used to buy, build or improve your main home.
  • The home is where you live, and you are the owner.
  • The loan is repaid in full over 30 years or less, by annuity or linear repayment. An interest only mortgage taken out after 2013 does not qualify.
  • You are paying interest on the loan.

The deduction applies to the loan for your main home only, not for a holiday home or a rental.

How much it saves

The deduction is now limited to the rate of the second tax bracket. For 2026 that rate is 37.56%. Even if you earn enough to be in the top bracket at 49.5%, the tax saving on your interest is capped at 37.56%.

Example: your mortgage is €300,000 at 4% interest, so you pay €12,000 of interest in the first year. The tax saving is about 37.56% of €12,000, which is around €4,507, before the next point.

The notional rental value

Owning a home counts as income in the Dutch system. You must add the notional rental value (eigenwoningforfait) to your taxable income. For most homes this is 0.35% of the official WOZ value. If your WOZ value is €400,000, the amount added is €1,400.

This reduces the benefit a little. In the early years, when interest is high, the deduction far exceeds the add back. Later, when the mortgage is small, the add back can be larger than the interest, and the result is a tax cost. There is a partial relief for homeowners with very low or no mortgage.

Why the benefit shrinks over time

With an annuity mortgage, you repay more principal each year and pay less interest. So the deduction falls as time goes on. This is normal. Your net monthly cost still falls, because you owe less.

What to check when buying

  • Choose an annuity or linear mortgage if you want the deduction.
  • Check the length of the fixed rate period, since your rate affects how much interest you can deduct.
  • Look at the net monthly cost, not just the gross figure, when comparing offers.
  • Ask the adviser to show the deduction using your actual tax bracket.

When you move or refinance

If you sell your home and buy another, the interest on the new mortgage keeps the deduction only if you use the profit from the old home on the new one, or you risk a gap known as the eigenwoningschuld. Speak to an adviser before you sell if you carry a loan from your last home.

The short version

The deduction is generous in the first years of an annuity mortgage and fades as you repay. It is capped at 37.56% and offset by a small notional income. Try different loan sizes in our mortgage calculator, then check your real saving with the Belastingdienst or a mortgage adviser.

How the deduction fades: a 30-year example

Take a €300,000 annuity mortgage at 4% over 30 years. The monthly payment is about €1,432.

  • In year one you pay about €12,000 in interest. Subtract the notional rental value of €1,400 (a home with a WOZ value of €400,000), and the net deduction is €10,600. At 37.56%, the tax saving is about €3,981.
  • By year 16 the balance has fallen to roughly €190,000, and the interest for that year is around €7,600. After the €1,400 add back, the net deduction is €6,200, which saves about €2,329.

So the saving drops from nearly €4,000 to around €2,300 over 15 years, while your monthly payment stays the same. The payment is the same, but a growing share of it is repaying the loan, which builds equity in the home.

Questions people ask

How long can I deduct the interest? For up to 30 years from the start of the loan.

Do I need to apply? You claim it in your yearly tax return, using the annual statement your lender sends you.

What about a mortgage I took out before 2013? Older mortgages keep some earlier rules, including some interest only loans, that newer ones do not.

Can I deduct it if I rent out part of the house? The deduction applies to your main home. If part is rented out, the treatment can change, so ask an adviser.

Is the deduction the same for every bracket? Not exactly. The saving is capped at the rate of the second bracket, 37.56% in 2026, so higher earners get less than their top rate.

What if my mortgage is higher than my home value? Only a loan used for your main home counts, and in some cases a portion of the debt may not be deductible. Ask your adviser to check.