Episode 4: Plan ahead, fix your mortgage rate the smart way
If you’re about to buy a home in the Netherlands, the mortgage interest rate you choose will influence far more than your monthly payments. It can affect your future borrowing power and even determine whether you’ll be able to tap into your home equity later on. That’s why choosing your fixed-rate period wisely can be a game-changer.
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How long should you fix your interest rate?
1 year, 5 years, 10 years, or even 20? Or maybe even a variable rate? There are many options when choosing your fixed-rate period. This is the number of years during which your mortgage interest rate remains the same. If you already have a mortgage, you will have to make a new choice once your current fixed period ends.
Choosing the correct fixed-rate period matters a lot. At Viisi, we help you select what suits your situation best — not just now, but with your future goals in mind. Why? Because your current choice can significantly impact what you can borrow later. And that’s largely due to the “toetsrente”.
What is the "toetsrente" and why does it matter?
- If your fixed-rate period is 10 years or longer, lenders will assess your borrowing capacity using your actual interest rate.
- If your fixed-rate period is shorter than 10 years, a standard benchmark rate (“toetsrente”) is used instead.
- This toetsrente is currently set at 5% and updated quarterly by the Dutch Authority for the Financial Markets (AFM).
- It protects borrowers from overleveraging during short fixed-rate periods, reducing the risk of payment issues when interest rates rise.
Looking ahead: using equity for future plans
The toetsrente doesn’t just affect what you can borrow now, it also impacts your ability to borrow in the future. At Viisi, your adviser always asks about your long-term plans. A second mortgage can be an affordable way to finance major goals: a renovation, a holiday home, or a study program. But your earlier choice of fixed-rate period might determine whether that’s possible or not.
Why this matters later: an example
Let’s look at Shivani and Frank. A few years ago, they took out a mortgage of €500,000 at 3.5% interest. They each earn €57,000 and their home has energy label C. Now, they want to renovate and need an additional €30,000. Their home has around €80,000 in equity.
Together with Viisi, they explore adding a second loan at 3.7% interest. Their current loan has 28 years remaining. The new loan would have a 30-year term with a 15-year fixed-rate period. Here’s where the fixed period on their existing loan makes all the difference.
Scenario 1: Longer fixed-rate period
- Remaining fixed period for loan #1: 10 years and 2 months at 3.5%
- Loan #2: 15 years fixed at 3.7%
- Weighted average rate: 3.51%
- Maximum borrowing capacity: €555,105
Result scenario 1: They qualify for the extra loan ✅
Scenario 2: Shorter fixed-rate period
- Remaining fixed period for loan #1: 5 years and 2 months at 3.5%; toetsrente applied: 5%
- Loan #2: 15 years fixed at 3.7%
- Weighted average rate: 4.93%
- Maximum borrowing capacity: €506,625
Result scenario 2: They do NOT qualify for the loan ❌
Conclusion
The longer fixed-rate period enables them to borrow €48,480 more. In fact, it makes the renovation possible. They wouldn’t qualify for the higher loan if they chose a fixed period of under 10 years.
Try out your own scenario using our mortgage calculator.
Short or long: what should you choose?
Several factors influence your decision. A longer fixed period gives you more certainty about monthly payments, which is why most people choose it. Over half of borrowers select a 10-year term; about 18% choose a 20-year fixed.
You should also consider how long you plan to stay in your home. At Viisi, we combine your preferences with lender offers and make a complete comparison of all lenders to help you make the best choices.
What a good advisor can do for you
Why it is wise to NOT just go to your bank and then stop comparing? Read it here Looking ahead, weighing scenarios, and preparing for future moves — that’s the real value of a good mortgage advisor. Short fixed-rate periods usually come with lower interest, while longer ones offer more stability (often at a slightly higher rate). But sometimes, the rate difference is minimal or even non-existent. In those cases, a longer fixed rate could be a very smart move.
An experienced advisor notices those opportunities. If there’s a chance you’ll want to increase your mortgage later, and your income is close to your borrowing limit, locking in your rate for longer than 10 years might make all the difference.
Want to know your exact borrowing capacity? Book a meeting with one of our experts. We’ll also show you how to leverage your home equity. Just want a quick estimate? Try our calculator.
Compare Viisi with others
| Mortgage advisor | Viisi NV | De Hypotheker | Hypotheekshop | Rabobank | ABN-AMRO | ING |
|---|---|---|---|---|---|---|
| Trustpilot rating | 4.9 (1361) | 2.5 (51) | 3.4 (12) | 1.4 (1704) | 1.4 (1718) | 1.4 (2876) |
| Number of lenders available | ||||||
| Advisor has a university degree | ||||||
| Periodic costs | € 0 | € soms | € 0 | € 50 | € 0 | € 0 |
| Life insurance | € 250-500 | |||||
| Mortgage protection insurance | € 250-500 | |||||
| Other insurances | ||||||
| Fee for first house | € 3,095 | € 2,495-3,495 | € 3,300 | € 2,300 | € 1,725 | € 2,000 |
Independent number of lenders
How many different mortgage providers are compared? At a bank, only mortgages from its own brand are offered. An independent advisor works with multiple lenders, allowing you to get better terms and/or a lower interest rate. In the Netherlands, there are approximately 40 lenders, so comparing almost always pays off!
Trustpilot
The rating is the average score from customer reviews online. These reviews are verified for authenticity by Trustpilot. The maximum score is 5.0, and the minimum score is 1.0.
Source Trustpilot: 3 december 2024
Periodic costs
Once the mortgage and insurance policies are arranged, do you need to continue paying periodically? A indicates there is no mandatory ongoing payment.
Mortgage protection insurance
A mortgage consultation should also cover the risks of death, disability, unemployment, and retirement. You can then choose whether or not to take out insurance to mitigate these risks. Taking out insurance may lead to higher fees from the bank or advisor. If a is shown, the advisory fee always includes this advice and arranging the insurances as well.
Life insurance
A mortgage consultation should also cover the risks of death, disability, unemployment, and retirement. You can then choose whether or not to take out insurance to mitigate these risks. Taking out insurance may lead to higher fees from the bank or advisor. If a is shown, the advisory fee always includes this advice and arranging the insurances as well.
Property insurance comparison
When moving, you often need other insurance, such as building- and contents insurance. Is advice on this included in the service, and are there multiple insurance products to choose from? If so, a will be shown in the table. Banks do offer insurance but only from one insurer.
University-educated advisor
A is included only if all mortgage advisors at the company have at least an academic degree (in addition to the required WFT diplomas).
Mortgage advisors and sales agents at banks are legally required to obtain diplomas and keep their knowledge up to date on a minimum level (WFT certification). In addition, an advisor can be an Erkend Financieel Adviseur (EFA) or even a Certified Financial Planner (CFP/FFP). Depending on experience and ambition, an advisor will reach a certain level of certifications.
Fee for advice + arranging the mortgage
If a standard fee is known, this amount is included in the table. If the fee varies by location, a range is shown. The fee you pay for mortgage advice and mediation is tax-deductible.