Dutch Mortgage and Consumer Loan Markets
This section provides a description of the Dutch residential mortgage market, including an overview of historical performance, common practices in underwriting and servicing, the Dutch public mortgage loan insurance scheme (NHG) and information on the Dutch consumer loan market.
Overview of the Dutch residential mortgage market
Compared to other mortgage markets in Europe, the Dutch residential mortgage market knows a wide range of mortgage loan products and a high degree of competition between mortgage lenders. Historic practices, culture and most importantly tax legislation, especially those pertaining to the deductibility of mortgage interest, have shaped the Dutch residential mortgage market in quite a unique way. For more information, see Description of Dutch Mortgage Loans.
The market is served by both banks and insurance companies. Dutch mortgage lenders use their own branch network and independent intermediaries as origination channels.
The Dutch residential mortgage market is characterised by mostly prime owner occupied mortgage loans. An industry-wide Code of Conduct provides a framework for originators with clear underwriting criteria (e.g. Loan to Value and affordability criteria), leading to little non-conforming and sub-prime mortgage loans being underwritten in the Netherlands and a relatively similar product offering in the prime mortgage market. Furthermore, a substantial part of mortgage loans is originated with NHG Guarantee, a public mortgage guarantee.
Servicing and arrears management is done by mortgage lenders internally, or by third-party servicers.
Dutch residential mortgage market in prospectusses
Prospectusses of Dutch RMBS transactions also contain information on the Dutch residential mortgage market. In order to provide a recent overview of the market, this part of the prospectus will be updated quarterly. The latest version of this document and an archive of previous versions of the document can be downloaded below.
After a number of years of decline, the Dutch consumer loan market started to grow again in 2015 and 2016.
The growth was due both to a positive consumer mood translating in increased expenditures and the reduction in the permitted Loan-to-value for mortgage loans, leading to an increased use of consumer loans for housing purposes (furniture, decoration, but also transfer tax, notary costs and other costs related to the purchase or improvement of a house).
Product wise, the major part of the market is still revolving credits, but fixed rate amortizing credits are becoming more prevalent.
The market is served by both banks and finance companies, Dutch consumer loan lenders use their own branch network and independent intermediaries as origination channels.
A broadly applied Code of Conduct provides a framework for originators with clear underwriting standards.