Withholding student debt when applying for a mortgage a little more difficult

For years, efforts have been made to link the data from the Education Executive Agency and mortgage lenders. Banks would like that, so that they have reliable data about the student debt of a mortgage applicant.

Lies often go unpunished

It is already the case that you must be honest about your student debt. The mortgage lender takes this into account when assessing how much you can borrow. But until now they could never really find out if you were telling the truth.

DUO loans are not registered with the BKR. That is still not the case, but banks can now obtain information from DUO through an intermediary. There is still a ‘but’ to this: as a mortgage applicant you must give permission to the bank or other mortgage lender to request the data.

That sounds non-binding, but banks are also considering making this a condition when applying for a mortgage. “We will discuss with the members what this will mean,” said a spokesperson for the Dutch Banking Association. He does not yet dare to say whether giving permission will become a hard condition.

Believe someone on their blue eyes

“But we’ve been arguing for a way to verify student debt for a long time. Not to bully, but because we have to protect people against excessive credit.”

ABN Amro does not want to say much more about it for the time being than the NVB. A spokesperson said that consultations are underway on the question of ‘whether we continue to believe people’s blue eyes’ or whether there will be an obligation to share the data with the bank as a condition for a mortgage.

ING is not yet playing with that idea, the bank said. However, the bank would like permission not to be required at all to be able to view the data.

Get rid of the non-commitment

“Ideally, it shouldn’t be dependent on whether or not the customer consents, as it still remains possible to withhold the student loan that would give an advantage over a customer who does give up honestly.”

The third major bank, Rabobank, did not immediately respond.

The NVB does not currently have precise figures about the number of student loan concealers, but a survey that the association had carried out in 2019 showed that 1 in 7 starters do not honestly state their student debt.

Withholding student debt can cause problems

The danger of this is twofold: in the first place it may be that you spend too much money on fixed costs to be able to pay everything. But violating the bank’s terms and conditions also entails other risks. For example, the right to NHG will lapse if it later transpires that you have a concealed debt with DUO.

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