“My parents are allowed to guarantee a mortgage”
At Viisi, we like to be clear about what’s involved in taking out a mortgage. In this section, we address common misunderstandings and also highlight some unique facts. This way, you’ll know what to expect and can distinguish facts from fiction.
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Find out if you are qualified“My parents are allowed to guarantee a mortgage”
Fact or fiction:Wealth differences between generations can be significant. If your parents are financially well-off, they might want to help you buy a home. One option often mentioned online is “guaranteeing a mortgage.” This means taking out a mortgage where your parents are also liable for the debt, also known as co-signing.
This might sound attractive: no money needs to be transferred, and the lender will only approach your parents if you fail to meet your payments. However, in practice, this is rarely possible in the Netherlands. Very few mortgage lenders allow parents to act as guarantors. So, the idea that parents can guarantee a mortgage in the Netherlands is mostly FICTION.
Is it ever possible for parents to guarantee a mortgage?
Yes, but only in rare cases. A few lenders may let you borrow more if your parents co-sign under strict conditions. You’ll typically need to prove that your income will soon be sufficient to carry the mortgage independently.
Still, even without a formal guarantee, parents can legally support you in other ways when buying a home.
1. Parents can lend you money
Parents can provide a whole loan or top up your mortgage from a traditional lender. It’s vital to ensure that your agreement, including the interest rate and repayment terms, meets the Dutch tax authority’s criteria. Otherwise, the loan may be classified as a gift, leading to gift tax.
If you’re borrowing from your parents and a commercial lender, note that both loans count when calculating your maximum mortgage. The benefit? If your parents’ loan meets legal requirements, the interest is tax-deductible, just like a regular mortgage. Viisi can help structure this properly.
Even if your parents don’t have cash, they might be able to borrow against the equity in their own home to support you.
2. Parents can gift you money
Gifts from parents are usually taxed, but if you’re between 18 and 40 years old, you can receive a one-time tax-free gift of € 32,195 (in 2025) if it’s used to buy a home. Remember that gifted amounts don’t qualify for mortgage interest deductions, but you also don’t pay interest on money you didn’t borrow.
3. A combination of a loan and a gift
Many Viisi clients use a mix of loans and gifts. For example, parents might lend their child part of the purchase price and then annually gift back the interest and repayments, up to the tax-free threshold of € 6,713 (2025). This makes the loan “cost-neutral” and may increase your borrowing capacity.
Other ways parents can help
There are additional ways parents can support you:
- Buy a property and rent it to you – Note that parents will pay the higher 10.4% transfer tax and you won’t benefit from any future property appreciation.
- Buy a property together – You and your parents become co-owners in this setup.
Do: Always document financial agreements. When dealing with family and money, always put things in writing. Think about what happens if someone can’t meet their obligations or passes away. Typically, any loan or debt will transfer to heirs. To simplify things, life insurance can help cover any remaining debt in case of death.
Don’t: Don’t overcommit parental resources. Some parents are so eager to help that they forget they might need their savings later, or that other children might expect the same support. Make sure everyone receives clear advice before making decisions.
FAQ: Are parents allowed to guarantee a mortgage in the Netherlands?
Can parents guarantee a mortgage in the Netherlands?
In most cases, no. Dutch mortgage lenders rarely allow parents to act as formal guarantors or co-signers. While the idea of parents guaranteeing a mortgage seems popular online, it’s mostly a myth under current Dutch lending practices.
Are there any exceptions where parents can act as guarantors?
Yes, but only in very limited cases. A few lenders may allow increased borrowing if parents co-sign under strict conditions. The child must typically prove they’ll soon earn enough to cover the mortgage independently.
What are alternative ways parents can help with a mortgage in the Netherlands?
Parents can support their children in several other legal and tax-efficient ways:
- Lend money – either wholly or as a supplement to a bank mortgage.
- Gift money – up to € 32,195 tax-free (in 2025) for home purchases if the recipient is between 18 and 40 years old.
- Combine lending and gifting – e.g., gift back interest and repayments up to the annual exemption (€ 6,713 in 2025).
Can parents lend money without triggering the gift tax?
Yes, but only if the loan is structured correctly. The agreement must include market-based interest and repayment terms and meet Dutch tax authority requirements. Otherwise, the loan may be treated as a gift, which could result in gift tax.
Can I still deduct interest on a loan from my parents?
Yes—if the loan meets legal standards, the interest paid can be tax-deductible, just like with a bank mortgage. Viisi can help you ensure the loan is correctly set up.
What if my parents don’t have cash but do have home equity?
Parents may be able to borrow against their own home to provide you with a loan. This is another way to access financial support without having savings readily available.
Can parents buy a home and rent it to me?
Yes, but this comes with caveats. Parents will pay the higher 10.4% transfer tax, and you won’t benefit from future home value increases. It’s crucial to weigh the long-term financial impact.
Can I co-buy a home with my parents?
Yes, you can co-own a property with your parents. You’ll each own a share and carry responsibilities accordingly. This setup can work well, but it also requires clear legal and financial agreements.
Should we document financial help from parents?
Absolutely. Always document any financial arrangements, especially with family. Consider job loss, inability to repay, or even death. A term life insurance policy can help ensure that outstanding loans are covered.
What are the risks for parents helping with a mortgage?
Parents may overextend themselves or fail to account for future needs, or other children wanting equal treatment. Always seek professional advice to protect everyone involved.