Corona consequences: mortgage holidays and other options
by Henk Jansen
It might be difficult to take a foreign holiday at the moment – but if you are having a tough time due to the coronavirus, a “mortgage holiday” might well be possible.
Some lenders will only consider a request depending on your particular circumstances, but they all stress that if you are worried about making mortgage repayments over the months ahead, you should not hesitate to contact them about your options.
As a country, the Netherlands is stepping up to guard businesses and individuals from the economic effects of its “intelligent lockdown” to protect vulnerable people.
Last week, the Dutch government announced a rescue package for companies, employees and freelancers to try to stop redundancies and bankruptcies while hospitality and entertainment venues are closed, schools shut and people urged to work from home.
In cities such as Amsterdam, people are being given more time to respond to measures such as the opportunity to buy the leasehold in their house for a reasonable price.
Various banks have already announced that you might be able to have a “payment holiday” for three to six months, where you temporarily stop paying interest and making capital repayments on your mortgage.
• Rabobank has said it is offering a payment pause of three months, on the basis that you later repay this debt. You need to contact the bank to apply.
• ABN Amro is implementing a six month stop to interest and repayments in order to give its commercial clients time to build some cash reserves, and it is offering this automatically. You only need to contact the bank by March 31 if you don’t want this to happen. For private individuals there is an option to postpone the payment on their mortgages for 3 months by filling this online form.
• Obvion is offering the option to postpone monthly payments for three months, and clients who want to take advantage of this need to contact the lender, clicking the “hulp bij betalingsproblemen” (help with repayment problems) option.
• ING asks customers who are having financial problems to contact the bank, and has a mortgage helpline open every day from 8am until 6pm. It can work with individuals to find a payment solution.
• Nationale Nederlanden (NN) also offers a “payment pause” option for three months or longer, and asks clients who are worried about making repayments to contact it so that it can go through your options “and carry on living, without financial worries.” This also applies to its Delta Lloyd mortgages.
• NIBC is aware that the coronavirus crisis is causing payment problems for some of its clients, and asks them to get in contact to discuss their simple options, such as a three month payment pause. In the future these months will need to be repaid, but without any extra penalty.
• bijBouwe urges customers with coronavirus-related repayment issues to get in touch so that it can assess their personal situation and find out what help can be offered. Its options include a new payment scheme, restructuring the debt or the services of a budget or job coach.
Asking for a payment holiday, of course, isn’t really like booking a sunny vacation. You should only request a pause if you are genuinely having difficulty in making your monthly mortgage payments, and the government’s financial package isn’t helping.
By taking a break in payments, you will carry this debt forward, which could have financial consequences for you in the longer term.
Other options that you could consider to reduce your monthly payments include:
• Reassessing the risk class of your mortgage. You could be paying extra, while your “risk” level has gone down because you have made repayments or your house is worth more
• Interest rate averaging. Your bank could offer you a lower interest rate for a small administrative fee, based on a mid-point between your rate, and the low rates currently offered.
• Renegotiating your interest rate. This might be an option for you to renegotiate with your current lender. There may be a (sometimes large) fee for this service.
• Change of mortgage type. Perhaps you have an offset mortgage (which links your mortgage to your savings account) with a high interest rate and monthly payment. You could change your mortgage type to a ‘linear’ or ‘annuities’ mortgage but use your savings to reduce the size of the loan.
• Change mortgage provider. You might find a much better offer elsewhere, even if you have to pay a penalty to leave your mortgage early.
Expat Mortgages’ specialists can assess your current mortgage and look at your options because there might be a relatively straightforward way to save hundreds of euros from your monthly payments.
Contact us to make a telephone or online appointment today.