Two earners may borrow more

For a large number of people there is uncertainty about their income in 2021. This is of course especially true for employees and entrepreneurs in hospitality, events and travel, to name but a few. The extent to which this income uncertainty will affect the housing market is also uncertain. The enormous shortage of housing can ensure that the consequences will be limited.

People who retain work and income, or even face a slight increase in income, could take out a slightly higher maximum mortgage next year. This is certainly the case for double earners: in 2021, 90% of the second income may be included in the calculation of the maximum mortgage amount, instead of the 80% that applied this year. At least that is the proposal of budget institute Nibud. Each year, Nibud sets the mortgage standards in the ‘Advice on Financing Burden Standards’. This advice is actually always adopted in full by the government and mortgage lenders. In a single, individual case, lenders can, however, go a little further than the standards allow, with proper substantiation. For example, you can think of expected income from freely available assets.

What benefit can two-income earners expect next year? That depends on the level of income, of course. One of Nibud’s examples is a household with incomes of €35,000 and €17,500 this year. With an average wage increase of 1.4% in 2021 and a mortgage interest rate of 1.75%, these two-income households can take out a mortgage of up to €248,360 next year. This year this was still €238,808.

With an average wage increase of 1.4%, the borrowing capacity of many single earners will also increase slightly. As in previous years, taking energy-saving measures or buying a very low-energy house can lead to a larger mortgage. Buyers of a very energy-efficient home, for example, can borrow between €15,000 or €25,000 extra. Many people with a study debt can also borrow a little more next year.

In short, a little more borrowing opportunities next year. However, Nibud does urge lenders to not only look back, but also look ahead in connection with the corona insecurity, when testing the ‘stability of the income’.