The increase is necessary because fewer and fewer homes are for sale below the current limit of 325,000 euros, the organization behind NHG reports. In 2020 the limit was still 310,000 euros and in 2019 the limit was 290,000 euros. The limit is calculated based on the average house price in June, July and August.
House prices are rising
Because fewer and fewer homes are being sold with the guarantee, the organization is now raising the limit again. The NHG expects the average price for a house to be 400,000 euros next year.
Prices rose by about 18 percent in the past year, the Central Bureau of Statistics (CBS) reported earlier today.
The NHG works as a kind of insurance to prevent homeowners who get into financial problems from being left with a residual debt if they have to sell their house due to force majeure. This may be because they can no longer pay the mortgage due to job loss, a divorce or the death of a partner.
cancel residual debt
Through the NHG, the bank or other mortgage lender is paid the difference between what was lent to buy the house and what the house still yielded when it was sold. The residual debt is then in the hands of NHG, which can cancel it.
The guarantee is intended as a last push to make it possible for starters to take out a loan for a house.
The premium that home buyers pay to use the NHG will also be reduced, from 0.7 percent to 0.6 percent of the mortgage amount. That amount will therefore be a maximum of 2,130 euros next year. In exchange for this, it is often possible to negotiate a lower mortgage interest rate with the mortgage lender. After all, it runs less risk thanks to the warranty.
In an explanation, the organization warns that constantly raising the limit to keep up with the rise in house prices is not the solution. That means providing more homes and the NHG is therefore happy with the extra money that the cabinet wants to invest in this.